Private cloud may be a better option for public agencies

Private cloud offers almost all the benefits of a public cloud, without the security and privacy headaches, Red Hat CEO asserts

If an agency is running more than 1,000 servers, it could save money and become more flexible with its processor resources by building an internal cloud-computing infrastructure.

A private cloud could offer almost all the benefits of a public cloud, but without the attendant security and privacy headaches, suggested Jim Whitehurst, president and chief executive officer of enterprise open-source software vendor Red Hat.

"There is a significant amount of value in a cloud infrastructure for a single entity that is running multiple programs and multiple data centers," Whitehurst said, speaking at the Federal [Information Technology] on a Budget Forum held this week in Washington.

"What is the benefit of a public cloud? For most large agencies in the government, or even medium-sized agencies, there is a not a lot of purchasing cost advantage with going to a third-party cloud," Whitehurst said. "The real benefit is getting high utilization of your existing infrastructure and flexibility around that."

At present, Red Hat has more than 50 enterprise customers with private clouds. "They are seeing huge benefits [by] running clouds themselves," Whitehurst said. He mentioned that one customer he spoke with, a chief information officer of a large organization running 25,000 processors, told him that public-cloud services such as Amazon would not provide much of a cost advantage to his organization, as his company could obtain servers at almost the same cost as those providers.

To set up a private cloud, an agency would pool all of its servers and offer the processing power to each department. It could enjoy the economies of scale that clouds could provide, and not worry about the privacy and security concerns that dog public-cloud providers, according to Whitehurst. It could also sign agreements with other agencies or organizations whose peak processing times are different from its own in order to have extra computing capacity on hand for those periods with the heaviest workloads.

Whitehurst said that today's public-cloud offerings are mostly in the "vaporware" stage, meaning there is not much of use for enterprise users, again due to the outstanding security and privacy issues. Building a private cloud, however, will help agencies get prepared for such time when and if public-cloud offerings become an alternative.

In April, IT analyst firm McKinsey & Co. released a report that argued that while small- and medium-sized organizations could save money by using public-cloud services, large organizations could actually save money by keeping their processing needs in-house.

Federal Computer Week staff writer Doug Beizer contributed to this report.

About the Author

Joab Jackson is the senior technology editor for Government Computer News.

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Reader Comments

Wed, May 27, 2009 Sam Washington, DC

There is no question that security of federal systems is not where it needs and aspires to be but going to a third party provider would simply exacerbate the problem. Third parties have traditionally not had any desire to adhere to federal security requirements making the argument that their way is the best way, which is not necessarily the case. I believe that a federal cloud the scale of a public cloud servicing multiple agencies but run by a federal entity should be considered. In this way, we would have the opportunity to take advantage of saas and iaas.

Fri, May 22, 2009 Jim Washington, DC

Cloud computing traditional has referred to internet-accessed, web-based services. There are at least two basic cloud services: software as a service (SaaS) which includes h/w, s/w, and the application(s) with built-in security, COOP and DR; and infrastructure as a service meaning processors and storage with the ability to host your applications, and also develop new applications using a cloud platform. To suggest an inhouse consolidated data center running virtualization, what IT marketing today is calling "inhouse cloud" is as cost efficient as a SaaS based on economies of scale is a stretch as many companies, both small and large, who have already made the change, can attest to. Many experts in IT have already pointed out the limited scope of the McKinsey report, which apparently analyzed only one or two cloud infrastructure provider models, meaning they only looked at the hardware cost savings of the cloud. They missed reflecting all the actual software and O&M costs, which Gartner reports is often 6x to 8x the h/w and s/w acquisition costs, of running IT operations inhouse today. In terms of security, how can one say the current model is any more secure based on past performance? Seemingly every week there is another data breach at a government agency. Government report after report mentions the weakness in current government inhouse data security operations. See

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