CIO Strategies 2013 - Cloud Computing for Public Sector and Government

CIO Strategies, 2013Cloud Computing for Public Sector and Government

Savvis IT Infrastructure

2013 Global IT Leadership Report

www.savvis.co.uk

2013 Global IT Leadership Report: Cloud Computing for Public Sector and Government 2

The UK Public Sector faces ongoing scrutiny and pressure to improve performance, offer faster, convenient, accessible and interconnected public services, at a time when resourcing and funding are in short supply. The UK government’s Digital by Default strategy, set out in the report “Directgov 2010 and Beyond: Revolution Not Evolution” highlights the need to make “radical improvement to Government internet services to provide higher quality and more convenient 24/7 services to users.”*

In other areas of the public sector too, the focus is on modernisation and consolidation to reduce both cost and waste. “The government aims to achieve efficiency and financial savings of £20 million in 2012-2013, £60 million in 2013-2014 and £80 million by 2014-2015 through the displacement of data centres in favour of the Cloud.”

Source: Government ICT Strategy Cabinet Office 2011

IT leaders in all UK public sector organisations are feeling the pressure. Independent research*, conducted by Savvis tells us the top three priorities for heads of IT in central and local government are driving efficiencies across the business to improve performance; increasing collaboration across systems and people to deliver connected, fast and seamless services; and accessing the right skills and specialist knowledge, at the right time.

The challenge for public sector CIOs is intensified, however, due to a lack of IT funding as well as the industry trend of low investment set against a backdrop of large, unwieldy legacy IT infrastructures, disconnected systems and a high proportion of manual processes.

Three Key Priorities for Public Sector CIOs in 20131. Gain efficiencies across the organisation2. Increase collaboration 3. Gain access to the best people with the

right specialist skills

Jonathan Sowler, Vice President, Government Industry, Savvis believes that the public sector’s “lack of IT integration has a significantly negative effect, leading to duplication of effort and inefficient processes”. He explains that for the public sector to operate flexibly and productively, IT leaders of local and central government need to modernise and remodel IT delivery infrastructures to take full advantage of technologies now available.

Sowler recommends a “buy not build approach, analogous to the consumption of electricity and other utility services, to better meet government demand for compute resource”. He believes the most efficient way to modernise public services is to establish a hybrid infrastructure with private and public cloud services and colocation of government-owned IT assets delivered as a managed service by a well-established service provider with end to end hybrid capability. “In this way IT leaders in public sector organisations can achieve cross-government economies of scale, deliver responsive IT systems and exploit new technologies at affordable, opex-based prices.”

IT Outsourcing and Cloud Strategies for Public Sector – the Benefits are ClearSavvis research reveals the top three areas in which public sector IT heads expect to gain efficiencies: moving to an on demand infrastructure model where IT capacity can easily be scaled up or down in line with business demand, standardising IT infrastructure and changing IT staffing levels and roles to drive efficiency and reduce waste.

Government heads of IT are very clear on the benefits of outsourcing. They told us they expect savings of just over 22 percent of IT budget, and the top reasons they would increase the amount of infrastructure they outsource are:•Increase IT agility•Eliminate dependence on legacy infrastructures•Move capex to opex•Refocus resources on core strengths

The Future is Hybrid Cloud


One survey respondent said “outsourcing made it easier to justify trying new types of IT services as there is less risk involved. It is cheaper and easier to be agile and flexible with new products.”

“The Government’s ICT strategy, issued by the Cabinet Office in 2011, outlines a firm agenda for data centre, network, software and asset consolidation” says Jonathan Sowler, “and a focused shift towards cloud computing to create a common ICT infrastructure. He explains “the public sector stands to benefit from cloud computing in several key areas: reduced cost and complexity, greater predictability, accelerated delivery and reduced risk, as well as lower barriers to change, such as the ability to buy through a range of vendors rather than a few large system integrators.”

Survey respondents agreed that “Service Providers offer expertise that we do not have. Outsourced solutions can help us achieve our objectives quicker and more cost effectively,” added one CIO.

Reinventing Public Sector IT Delivery Models in the CloudCloud computing offers compute resources on a user and per usage basis often with no fixed term contract or up-front fees, and can be used for individual projects, by department or function, or throughout an entire organisation. This type of delivery model is also known as utility computing and can be deployed within a private cloud infrastructure to assure security, privacy of data and SLA driven performance targets, or a public cloud infrastructure where cost reduction and capacity spikes are the priority.

Public sector survey respondents cited the benefits of utility computing as reducing cost, improving quality of service, as well as IT infrastructure scalability and flexibility, enhancing security and reducing administration time.*

In his role as Director of Cloud Solutions at Savvis, Andrew McCreath is regularly on site working with public sector organisations. “The challenge is that most organisations have legacy solutions with ageing infrastructures, so they still need to own on-premise IT equipment and use colocation and other physical services,”. He continues “the vision of a utility computing model does not demand wholesale overnight migration to the cloud. Government data centres are typically the embodiment of years of conflicting pressures and operational requirements.”

“As a result, a hybrid data centre environment has been created, combining in-house services, collocated services, hosted services and public and private cloud computing.”

McCreath advises public sector CIOs to select an IT infrastructure provider that has capability across the hybrid value chain from colocation, managed hosting, private and public cloud, as well as networking and consultancy services. He says “not all utility computing providers are equal. Infrastructure-as-a-Service should be provided according to a flexible model that lets government departments choose which components of their IT infrastructure they continue to own and manage, and which aspects are more appropriately owned and managed on their behalf.”

He goes on to explain how a hybrid solution could work in practice:• Legacy applications could be hosted and

migrated to a cloud utility model over time, and if relevant.

• Core or select government services would continue to be supported in a colocation data centre.

• Core government services could be managed or hosted in a private cloud

• Spikes in demand could be supported by cloud bursting into the public cloud to avoid over provisioning and waste.

Public Sector Adoption of Cloud ComputingIT leaders in central and local government companies agree on the value of cloud computing, with 45 percent of heads of IT of public sector organisations having adopted private cloud computing, 21 percent use a hybrid model of part private and part public cloud, and 16 percent use public cloud services. Figure 1

Jonathan Sowler comments “as part of internal targets to drive efficiencies, government departments are rationalising server estates by turning to private cloud”, he believes that this trend will continue as long term government contracts come to an end, and accredited public clouds emerge. “Attitudes are changing because government heads of IT now know more about cloud, and are taking advantage of government accredited services available in the public cloud”.


He believes hybrid cloud adoption is set on a similar course with “secure data sitting in a dedicated government accredited private cloud, where high volume workloads and peaks are managed by the public cloud”.

Government IT leaders reported many benefits from cloud computing, from ease of being able to scale up or down compute, storage and bandwidth consumption to manage unpredictable and fluctuating demand , to reduced administration time, faster provisioning, enhanced security, faster time to market and flexible billing models. Figure 2

The CIOs surveyed represented large public sector and enterprise organisations (three out of five work in public sector companies with more than 5000 employees) with complex legacy IT infrastructures, large application sets and a high degree of customisation. From the range of applications that IT could potentially outsource, heads of IT are choosing those that are the most portable and easily separated from existing systems. These applications are often non-mission critical, and viewed as an overhead, so reducing the cost of maintenance is highly desirable: 64 percent of IT heads use cloud computing for email, 55 percent for intranet, 41 percent for website and microsites and 41 percent for CRM applications.

“Government departments are risk averse and like to take a proven approach, so starting with simple applications that lend themselves to Software-as-a-Service, like CRM, makes sense” says Sowler.

When asked what applications IT leaders are evaluating for the cloud, 31 percent said batch processing of large quantities of data, for example, consumer transactions for benefit claims or tax returns. Thirty percent said backup and disaster recovery, 28 percent test and development, perhaps in recognition of the flexibility and scalability cloud offers, as well as the ability to turn cloud services on and off quickly.

Figure 3: Which of the following applications are you currently putting in the cloud?

0 10 20 30 40 50 60 70

Email

Intranet

Website & Microsite

CRM

Figure 1: Does your company use cloud computing?

0

10

20

30

40

50

Yes, we use ‘private’ cloud servicesYes, we use ‘public’ cloud servicesYes, we use a hybrid model of part private/public cloud

Figure 2: Select the most important benefits of cloud computing

29%

23%

29% ability to scale up and down compute, storage and bandwidth consumption to manage fluctuating demand29% reduced administration time24% fast provisioning time23% enhanced security23% faster time to market23% flexible billing models

24%

23%

23%

29%


Sowler adds “Government typically generates lots of data and they have a duty of care to protect and secure that data. Cloud is a cost effective, resilient way to achieve that”.

For some applications, IT leaders in the public sector show a high level of commitment to cloud as they have completely transitioned entire applications to a private cloud deployment. Each of these applications can either operate as discrete areas, such as test and development, or are new technology areas such as Big Data analytics, with fewer legacy complications. Seventeen percent of public sector IT leaders outsource their entire test and development function, 13 percent their storage and Big Data analytics applications. Figure 5

Interestingly, there is a significant difference in the number of respondents who outsourced their entire application to the public cloud, compared to applications outsourced to the private cloud. Eight percent of public sector CIOs outsource all their

storage to the public cloud, 7 percent outsource Big Data analytics and 12 percent outsource Mission Critical applications.

This result is surprising, says Sowler, as we wouldn’t have expected to see mission critical applications outsourced to the public cloud. However, there are some government departments that consider email and online services as mission critical, so if this is the case, it makes more sense” responds Sowler.

Overcoming Public Sector Resistance to the Cloud In his work with public sector organisations Andrew McCreath has seen a growing trend to cloud and utility based computing and believes that will continue. Yet when asked why some IT heads were not using cloud services, McCreath explains, “They tend to have concerns around the amount of management resource required, or compliance and legal reasons of ensuring data is processed in authorised jurisdictions, whereas others are deterred because their applications cannot easily be migrated to the cloud.”

There will always be those that take longer to convince, he says, but we’ve actually come a long way, as for many years the main resistance was cultural, a difficult area to address because it’s less tangible. At least now the reasons are practical ones, so they can be tackled, resolved and changed over time says McCreath.

“Government should always look to outsource the less important areas, but aim to retain what’s important, like strategy, or work that requires specialist government knowledge or is critical to their business” adds Sowler, “but what’s equally important; is to maintain a significant

Figure 4:Which applications are you evaluating for the cloud?

Batch Processing

Back Up and Disaster Recovery

Test and Development

0 10 20 30

Figure 5: For which applications does your company use private cloud throughout the organisation in this area?

Test and Development

Storage

Big Data Analytics

0 10 20

Figure 6: For which applications does your company use public cloud throughout the organisation?

Storage

Big Data Analytics

Mission Critical Applications

0 10 20


understanding of technology in house, so that government IT heads know how to exploit technology to full advantage for their business” emphasises Sowler.

McCreath explains that one of the benefits of cloud is that it greatly reduces capital investment, not only because the service provider takes responsibility for delivering, maintaining and owning the IT infrastructure, but because they also manage and support the whole service.” He continues “IT heads of public sector need less capital for the infrastructure, and less capital for resourcing, as delivery is down to the provider. In fact even less capital is required as the provider signs up to SLAs, so performance is easy to monitor.”

“Many government departments and public sector organisations have large application estates, and or legacy applications. Cloud promises long term benefits but sometimes there’s a short term pain for applications that need to be reconfigured and made ready for the cloud. In some cases and with certain applications it may not make sense to migrate everything to the cloud, but this is usually highlighted in the evaluation and business case stage of the process.” He says “that’s why it’s so important to have a provider that can deliver a hybrid of colocation, private and public cloud services, to cater to every eventuality, as well as future needs”.

McCreath believes that compliance and data security have always been priority areas of concern for government departments and public sector organisations. So much so, that the UK government has developed a Compliance Scheme and we’re starting to see new ‘compliant’ or ‘accredited’ services being made available, he explains. In time, concerns around compliance will disappear and that change has already started to happen. What we’ll end up with is a list of objections, similar to the those once held by commercial enterprise, around managing, integrating, procuring and securing services.

What to Consider when Selecting an Enterprise Cloud Provider1. Hybrid Cloud Capability - select a hybrid cloud

solutions provider offering a mix of colocation, private and public cloud deployment to manage legacy technology and new and developing IT requirements.

2. Service providers who can offer L1 and L2 government accredited services

3. Enterprise-class Proven Experience - work with a provider that has a track record in delivering enterprise cloud solutions for high availability, performance, scalability, business class SLAs and self-service tooling.

4. Data Sovereignty - choose a provider with a global network of data centres and with multiple data centres in all the major commercial centres required, so companies can select the best in-country data centre location to support their compliance and legal requirements.

5. A True Utility Contract – make sure the provider offers a consumption model that’s charged on a per user and usage basis, that’s transparent in all its conditions.

6. Enterprise-Class Security – with government security accreditation for all core utility services and facilities, as well as dedicated security teams.

7. Dedicated Network Connectivity – to help ensure a robust, enterprise level security to all network traffic irrespective of bandwidth required.

Figure 7: What are the reasons for not using cloud computing within your company?

0

10

20

30

40

50

60

47% Concerns over how much management and control resource is required47% application compatibility issues33% legal/compliance issues about processing workloads in an unknown geographic location


ConclusionIT leaders in the public sector and government are under never ending pressure to squeeze more and more value out of their IT infrastructure, drive down costs and deliver better value to the tax payer. As a result, many heads of IT are rethinking business models and combined with government directives to go digital by default, are adopting utility computing to help them achieve this.

Struggling to manage IT legacy and a move to cloud computing, government heads of IT are fast realising the benefits of hybrid cloud, combining colocation services for legacy infrastructure and applications, along with a combination of private and public cloud services to blend the optimum mix of performance and cost efficiency, compliance and security.

2013 will be the year of the hybrid cloud for the public sector

Find your solution with Savvis Public sector and enterprise organisations around the world have turned to Savvis to help them achieve the IT infrastructure they need to excel in today’s constantly changing markets. Savvis will help you make the right decisions about how and where to house your data and infrastructure. Using a blend of colocation, managed hosting and public and private cloud services, we can ensure you achieve the efficiencies you’re looking for, the agility your business demands, and the focus on what adds true value to your organisation.

About SavvisSavvis, a CenturyLink company, is a global leader in cloud infrastructure and hosted IT solutions for enterprises. Nearly 2,500 unique clients, including more than 30 of the top 100 companies in the Fortune 500, use Savvis to reduce capital expense, improve service levels and harness the latest advances in cloud computing.

For more information: Call us on +44(0)207 400 5600 email us at: [email protected] or visit us at www.savvis.co.uk

About the ResearchThis independent survey was commissioned by Savvis and conducted with 550 CIOs, IT Directors, Heads of IT and Senior IT Managers of global enterprises based in the USA, UK, Germany, Japan, Hong Kong and Singapore. 35% of the audience was from financial services companies with more than 500 employees and global annual revenue between $1billion and $100billion. The research used a combination of online fieldwork methodology and telephone interviewing and was conducted by Vanson Bourne, a research based technology marketing consultancy committed to the latest MRS Code of Conduct.

What? Why?

Colocation Offers government IT departments space and power for their servers and networking equipment in the service provider’s data centre

Delivers considerable economies of scale, frees up internal networks, can accelerate access speeds due to increased bandwidth

Managed Hosting

Provides dedicated servers and a full suite of technical support, maintenance and monitoring services

Alleviates government IT departments of virtually all administrative and maintenance tasks and is a strong solution for legacy applications

Dedicated Cloud

Delivers a fully managed, customisable, private cloud infrastructure with dedicated, secure virtualised hosting

Enables government IT departments to deploy compute and storage resources quickly and easily when needed

Open Cloud Multi-tenanted public architecture offers a highly flexible computing environment with the scalability and security of an enterprise-class platform

Compute resources can be provisioned elastically without the burden of long-term contracts or the lead-time of traditional deployments

www.savvis.co.uk

© 2013 CenturyLink, Inc. All Rights Reserved. The Savvis mark, logo and certain Savvis product names are the property of CenturyLink, Inc. All other marks are the property of their respective owners. -2-

Canada6800 Millcreek DriveMississauga, ONL5N 4J9

Tel 1.877.387.3764 www.savvis.ca

EMEAEskdale RoadWinnersh TriangleWokinghamBerkshire RG41 5TSUnited Kingdom

Tel +44 (0)118 322 6000www.savvis.co.uk

Asia Pacific50 Raffles Place Singapore Land Tower #13-01 Singapore 048623

Tel +65 6768 8000 www.savvis.sg

Japan7th Floor Kyodo Building (Jinbocho 3cho-me) 3-29 Kanda Jinbocho Chiyoda-ku Tokyo 101-0051 Japan

Tel +81.3.5214.0151 www.savvis.jp

Global Headquarters1 Savvis ParkwaySt. Louis, MO 63017

Tel 1.800.SAVVIS.1 (1.800.728.8471)www.savvis.com

GermanyWesthafenplatz 160327 Frankfurt am MainGermany

Tel +49 69 710456 156www.savvis.de

Documents

CIO Strategies 2013 - Cloud Computing for Public Sector and Government