April 19, 2011 – Cloud computing offers millions of dollars in federal government cost reductions from information migrations and data centers closures, according to recent testimony on measures to cut IT spending. However, analysts and industry leaders urged for flexibility and continued innovation to keep government actions relevant and fiscally responsible.

A handful of government CIOs and private analysts and technology officers recently stated those assessments in testimony before the Congressional Subcommittee on Federal Finance Management, Government Information, Federal Services and International Security. As part of that testimony, Vivek Kundra, CIO for the federal office of management and budget, offered a five-point plan that follows through on previous efforts, which he said have already cut $3 billion from lifecycle costs of major IT investments. That plan, broken into intervals over the next 18 months, involves: applying “light technologies” like cloud computing and shared services; strengthening program management; aligning budgeting processes within the technology cycle; streamlining governance and improving accountability; and increasing engagement with the industry.

In his testimony, Kundra pointed to plans by the Department of Agriculture and the General Services Administration to migrate a combined 137,000 email users to the cloud in the next five years, which would reduce $42 million in IT costs over that same time period. As part of that movement to the cloud, Kundra said federal agencies expect to close 100 data centers this year, with about 700 more to be shuttered over the next five years.

Kundra said the government’s “cloud first” policy outlines secure, accelerated deployment options to counter recent years where federal IT spending was swallowed by spending on redundancies at a far larger rate than in the private sector.

“As a government, we too often rely on proprietary, custom IT solutions, instead of leveraging new technology and looking at common solutions to fit our needs. By leveraging shared infrastructure and economies of scale, ‘light technology’ or cloud services, present a compelling business model for Federal leadership,” Kundra testified.

Current federal deployment and cost reduction plans provide opportunities, but also the persistent problems of government actions slowed by bureaucracy and stifled by compliance, said Alfred Grasso, president and CEO of The MITRE Corporation, a not-for-profit information technology support and resources. Grasso pressed Congress to present a clear message on streamlined spending that also provides the opportunity to change with developing IT opportunities.

“Successful organizations will routinely abandon less valuable activities to increase speed and reduce cost. We must not be reluctant to do the same,” Grasso said.

Rishi Sood, research vice president at Gartner, noted the rate at which federal IT spending has “exploded” in the past decade, growing 248 percent to $80.1 billion this year. While Sood said some of that was justified by governance and security expansion, he pushed for urgent virtualization and outsourcing, and lauded the stronger role of the CIO and other elements presented of President Obama’s reform plan for government IT.

“In shaping IT policies and actions, federal leaders should learn from trends emerging in other industries,” said Sood.

For full accounts of the testimony, click here.

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