Agencies not seeing dollar signs in the cloud

Agencies slowly are realizing the benefits of cloud computing do not rest in real dollar savings.

Instead, agencies, such as the Transportation Department, should expect the move to cloud services to provide mission-focused value. Maria Roat, the DoT chief technology officer, said the cloud provides much more capability, which lets the organization be more flexible.

“When you talk about the costs, I don’t know that everyone knows the true costs of their systems and applications, and when you talk about the people, and when you talk about all the things that it really costs to run an application or to run something for your customers. But in moving to the cloud, there may not be that cost savings,” said Roat Thursday at the Federal Cloud Computing Summit, sponsored by FedSummits, in Washington. “When you talk about capabilities around surge and being able to plus up, you are only paying for what you use. When you dial back down, you are not using that capability so you’re not paying for it. You will see some inherent cost savings that way, but you will get much more capability and functions then you would if you would do it in house.”

Dave Mihelcic, the chief technology officer for the Defense Information Systems Agency, said during a panel that the rate of return on cloud investments may be only around 5 percent.

“The cost of a host environment, the virtual machines and other hardware, is roughly 10 percent of any IT system. The other 90 percent is software and systems administration,” he said. “By moving to the cloud, we save about 50 percent of the cost of the hosting environment. So 50 percent of 10 percent of your total costs is only 5 percent. And sometimes there is a long cloud migration so you have to do a lot to save 5 percent. It’s not as big of return as you thought.”

Mihelcic said agencies will see their biggest benefits from cloud in modernizing apps, being able to scale up and down on demand and having the agility and speed to get services to market.

Roat said DoT views the cloud in the same light.

She said cloud brings the flexibility to test a new functionality quickly and go into production in days or weeks.

New geospatial, cloud strategies

Roat said DoT is looking to move several mission-critical applications to the cloud in order to extend their reach or create more value.

One example is around geospatial data and capabilities.

“We have a lot of opportunities about Web feature services. Rather than just having images available on some of our technology, part of the plan is to really move out into the cloud and make those Web features available,” she said. “That we can do spatial analysis, and not just DoT, but stakeholders, the states, research entities can use the information that is out there and really do the spatial analysis that needs to be done.”

DoT drafted a geospatial plan, which should be finalized by mid-February. The strategy will do two things: lay out a roadmap of where DoT needs to go in the coming years and make current services and data more accessible.

Roat said DoT will bring together about 50 stakeholders in April for a two-day meeting to figure out how to create standards or guidelines for managing huge databases of addresses that agencies such as Transportation, the Postal Service and the Census access and own.

“The address around geospatial, and having Transportation be the lead around the address space. Your house, where is it?” she said. “Having all that address information and geocoding that because your barn doesn’t have an address. But again, building that out and really driving geospatial in that area.”

The address idea came out of a data call in early December to DoT bureau-level CIOs. Roat said her office asked what they would do if they had 90 or 180 days to develop a new service or improve an existing function.

“We talked about if we would stand up some type of digital services capability, what could that look like. And we solicited CIOs and others to ask, if we had this capability, what projects or things would you like us to tackle,” she said. “About 20 things came out from CIOs and others. There were a few 90-day projects, some could be quick wins and others are much longer-term projects where we have legacy systems that are more than 10 years old.”

Governing the cloud

The exercise showed DoT had a lot of opportunities to take advantage of cloud and mobility.

Roat said another idea that came from the call for topics was figuring out a new approach to collecting tolls at the St. Lawrence Seaway. She said instead of collecting cash or going to Pay.gov, shipping companies could pay via an app.

DoT is developing a cloud strategy to bring these ideas together.

Roat said the document will focus on the management and governance around cloud, including privacy and security challenges.

“There is a whole lot of work that needs to be done before you put money on a contract,” she said. “Setting the standard, setting the governance around cloud for the department will really help move the ball forward because we have to be innovative. We have to be agile. And, if we put the right structure in place, we can do that and we can move very quickly and adapt quickly to what the business needs.”

Roat said the strategy also will take advantage of the work DoT is doing around enterprise architecture. Transportation will hire in the coming week a new chief architect to help lead an enterprise- services effort.

Roat said she hopes the cloud strategy will be finalized by the end of March.

The change in expectations around cloud comes from a maturity of understanding the potential of the technology instead of just straight cost savings.

“I think it’s maturity. I think it’s trust. I think, with FedRAMP around, security people are getting a lot more comfortable with the security model and what the security should look like in the cloud environment. There’s a lot more comfort,” Roat said. “I think it just took time to make that shift from ‘I don’t have to be able to touch and feel everything. I don’t have to hold those racks. I don’t have to see it.'”

“It’s been a culture shift, if you want to call it that. It’s just been a transition. I’ve seen that over time,” she said.

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