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Data Storage Opens Up New Source of Work for IT Firms
Contractors Shift Focus to Cloud Computing, Virtualization

By Kim Hart
Wednesday, May 13, 2009

Like many large information technology firms in the Washington region, Apptis has been in the business of helping government agencies integrate huge software and hardware systems. The government has paid the company hundreds of millions of dollars to buy new equipment, set it up and provide teams of engineers to maintain it.

But about a year ago, the Chantilly IT contractor changed course. Instead of selling hundreds of servers and costly software licenses, Apptis began helping agencies house data on outside servers, offering access to less-expensive software services and consolidating equipment to cut costs.

"We were cannibalizing our own business," said Phil Horvitz, Apptis's chief technology officer. "But if we didn't do it, someone else would have come in and done it instead."

Nearly half of the government's information technology budget -- about $33 billion -- is spent in the Washington region, according to Input, a Reston market-research firm that tracks federal contracts. Senior analyst Deniece Peterson expects IT spending to increase 3 to 4 percent over the next five years.

Contractors that sell technology services are shifting their business strategies to embrace the latest buzzwords in government IT: cloud computing, open source and virtualization.

To industry outsiders, the terms may seem bizarre and contrived. But proponents say the services, which are often used together, can increase efficiency and save the government billions of dollars in IT costs.

Cloud computing, which refers to storing data in remote data centers -- or "clouds" -- rather than onsite servers, has gained traction over the past six months. Companies such as Amazon and Salesforce want agencies to store e-mail, records and other information on their servers. Employees would access information through an Internet browser.

"There are more events about cloud computing than there are about homeland security these days," Horvitz said. "But we're really still at the infancy of cloud computing. It's emerging."

While some agencies are experimenting, officials are wary of storing data on servers that are out of the government's control. Companies such as Google and IBM are trying to convince officials that their clouds are heavily guarded and even better able to withstand threats than privately run clouds.

In addition, uniform standards have not yet been developed to ensure that different cloud technologies can work together securely.

"Security may be the real choke point of adoption in the federal government," said David Link, chief executive of ScienceLogic, a Reston IT firm.

In a survey of several hundred federal chief information officers, ScienceLogic found that only 11 percent of departments were using cloud computing, but many said they anticipated using the technology in the future.

"Until there's a set of standards around security, you're going to have tepid adoption rates," he said.

Nonetheless, many government IT firms around the Beltway are setting up their own data centers to sell computing capacity to their customers. Others are partnering with companies that already have massive data storage facilities.

CSC, based in Falls Church and one of the area's largest systems integrators, maintains 40 data centers and has partnered with Terramark, which recently built a data center in Culpeper, Va. Yogesh Khanna, chief technology officer of CSC's public sector IT practice, said the company last year reorganized its engineers, with one group focusing on data center technology.

Skeptics say that it's nothing but hype.

"Cloud computing is the same old client-server computing we've known for years, except pretending to be intoxicatingly new and different and liberating," wrote Peter Lucas and Joseph Ballay in a report published by Maya Design, a technology research lab. "The marketing fairy godmother waved her wand over the whole 'new model' and pronounced it 'cloud computing.' "

Technologists say cloud computing is largely made possible by its distant cousins: open source and virtualization.

Open source refers to software products that are created by a large number of third-party developers. The software is often publicly available for free and lets developers copy and change as much as they want.

Agencies can benefit from the improvements made by others. Corporations have been using open-source operating systems, such as Linux and MySQL, which manage all the activities on computers, for years, and now they're getting a closer look in the public sector, as well.

For example, the Defense Information Systems Agency, the Defense Department's IT arm, is using open-source software in its human resources department, hoping to benefit from the changes others make to its code. The Navy also uses open-source systems.

Agencies typically pay for a subscription to access the software, and a company like Red Hat, which develops open-source systems, helps maintain the technology and fix glitches.

Red Hat, based in Raleigh, N.C., opened an office in Washington four years ago to cater to the government. The intelligence community has been one of the biggest users of open-source systems, said Paul Smith, general manager of Red Hat's public sector practice.

"We've captured the early adopters," he said. "What we're doing now is capturing all the mainstreamers, who are asking questions like, 'Does it work, and is it secure?' "

Tresys Technology of Columbia partners with open-source companies such as Red Hat to provide added security features to the software products.

"The more people who are involved in building it, the better product we're going to get," said Gary Latham, Tresys executive vice president. Some government agencies have shied away from adopting open-source technology, often choosing to stick with the proprietary tools they are used to, such as Microsoft's software offerings.

Companies selling cloud computing and open-source technologies to the government typically also provide a virtualization service. Virtualization lets multiple operating systems run on one hardware system, cutting down on the servers an organization has to maintain. For example, a dozen employees can work from one computer, rather than each employee having his own.

"People are working on projects to consolidate servers or applications to get power savings and spend less administrative time" running their infrastructures, said Link of ScienceLogic, whose survey indicates that 30 percent of government organizations are using some sort of virtualization, twice as many as a year ago.

GTSI, an IT firm in Herndon, has moved from providing equipment and building infrastructure systems to offering services related to all three trends.

"When we took a look at our strengths internally, we thought, 'Why aren't we doing that?' " chief executive Jim Leto said. "The system integrators are evolving to look more like us because those are the areas the government is pushing."

Kim Hart writes about the Washington technology scene every Monday. Contact her at hartk@washpost.com.

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