Risks and Challenges
Clearly there are many reasons an organization might consider transcending to the clouds. There are of course also reasons that the cloud may not be the right option for every organization or for every type of application.
Security is a key concern of many potential cloud customers. Certain organizations and agencies may never be comfortable with housing specific categories of data outside of their own walls. Additional, organizations, agencies and/or governments may have regulations as to physical locations where certain types of data are allowed to be stored. Data stored in the cloud could be anywhere. The good news is that security concerns in the cloud are being proactively addressed by the federal government in anticipation of the cloud first initiative mentioned earlier. In 2009 the GSA’s cloud office established working groups on both security and standards and in 2010 they launched a government wide security certification and accreditation process for solutions in the cloud. Lockheed Martin conducted a survey in 2010 where they found that the more people know about the cloud, the less concerned they are with security in the cloud. 
Some have cited reliability as a concern. This may seem contradictory to the availability benefit noted earlier, but surely not all cloud providers have the same level of redundancy built into their systems. Additionally, cloud providers tend to co-locate their servers in one or few locations – taking advantage of favorable real estate and power costs- so a major power outage could have a significant effect on service availability.
There are instances where cloud computing may not be a cost effective solution, especially for organizations with large amounts of data and intensive data processing requirements. Potential cost savings could be overshadowed by the cost associated with the high bandwidth required to process all that data.
Another risk to consider when evaluating cloud based solutions has to do with the loss of control that occurs when you opt for the cloud. There are several aspects of this loss of control to think about. IT staff lose a level of control because they are no longer free to design platforms for specific business needs and they can’t change technology on a whim. Another concern relates to the portability of cloud based solutions. Because of the relative immaturity of the technology, standards have yet to be established and cloud APIs are proprietary. If a cloud provider were to go out of business, or if the service they deliver deteriorates, there may be no quick exit strategy for customers who need to switch to another cloud provider.
As previously mentioned, one potential benefit of cloud computing is cost savings. And there is compelling evidence that migration to the cloud is definitely worth it for many computing needs of many organizations and agencies. When evaluating cloud solutions it is important to look at the cost of migration as well as the costs of operation once transition to the cloud is complete. What follows are some factors to consider when evaluating potential migrations to the cloud.
Clearly, the complexity of the migration is a significant factor in its overall cost. Complex migrations take more time and effort than simple ones. The nature of the capabilities being migrated as well as the volume of data involved in the migration will significantly impact the cost of transition to the cloud.
Cost benefit is realized when equipment can be eliminated. Cloud solutions that result in an organizations elimination of servers and other equipment will realize more cost benefit. The more capacity that is moved to the cloud, the more an organization can lower their maintenance, acquisition and IT staff costs – increasing the cost benefit of cloud migration.
Another factor is the efficiency of the organization’s current operation. If an organization has already achieved high utilization of their resources through optimization, load balancing or constant high volume operations, they may find less benefit than an organization that resources for peak but normally operates way below peak.
The type of cloud involved may drive cost as well. The potential for cost savings is greatest with the public cloud because there are many customers using the same resources allowing providers to pass savings along to their customers. Community and private clouds have more limited audiences, making them likely to be more expensive per user. Clearly the extent of a private or community cloud can influence the amount of cost savings they can offer to end users.
Requirements for security can also drive costs of cloud migration and on-going operation. Storage and transmission of secure data requires both digital and physical safe guards which naturally come with a price.
Additionally, there are organizational and cultural considerations when migrating to the cloud. Marketing, training and education are important when introducing any new tool or process to an organization in order to combat cultural resistance. New policies, standards and software license agreements (SLAs) may need to be developed, deployed and implemented.
Examples and Findings
While there are many reasons for organizations to consider the cloud, there are also many factors to evaluate before making the leap. It seems that the cloud offers huge potential benefits for smaller organization while larger organizations and government agencies are likely to find that some hybrid solution combining public and private cloud concepts will be their best option.
In light of the cloud first directive, several agencies of the US Federal government have already begun to deploy solutions in the clouds with some relatively impressive successes. By targeting capabilities that are currently expensive or inefficient and well suited to the cloud is a good strategy for cloud migration. A few examples follow.
Los Alamos National Laboratories wanted to roll out an infrastructure on demand architecture to facilitate quick rollout of new projects and eliminate other delays. Because of the nature of their work, security was a significant concern so they decided to go with a private cloud. They created a cloud using Microsoft© SharePoint for cloud workflows and integration point, VMware vCloud Director to manage and operate the cloud, and VMware vShield to provide security. With this architecture they have been able to provision a server, an activity that used to take 30 days, in under 30 minutes. As they are now using virtualization, they have been able to eliminate physical hardware reducing maintenance costs, power and electronic waste. According to Anil Karemel, IT Manager at Los Alamos, they expect their eventual savings to be $1.3 million annually. No data was available on the cost of the migration. 
The Defense Information Systems Agency, recognized that implementation of new software and systems at the DoD was expensive, time consuming and was being conducted in an environment less than conducive to cross collaborate and ubiquitous delivery. To address this, DISA created Forge.mil which provides tools and services for rapid development, testing and deployment of software to the entire DoD. Cloud provider CollabNet provides a software development platform that facilitates reuse and collaboration for Forge.mil’s 5000 users. DISA estimates that Forge.mil saves between $200,000 and $500,000 per project.
The US Federal Government’s website, USA.gov provides users with information about benefits, grants, jobs, taxes, health, voting, technology, and other information useful to the citizenry. Naturally access to USA.gov varies dramatically as conditions in the country and the world change with spikes in traffic around natural disasters, national elections, etc. The General Services Administration decided to move USA.gov to the Terremark’s Enterprise Cloud service. In doing this they found that site upgrade time went from nine months to one day and monthly down time moved from two hours to near zero. The cost to operate the legacy USA.gov operations was $2.35 million annually plus personnel costs of $350,000. The move to the cloud resulted in a total annual cost of $650,000 resulting in a 72% cost savings.
More examples of federal migrations to the cloud can be found in .
The cloud computing paradigm offers organizations and federal agencies an alternative to meeting all their IT needs with in-house resources. Cloud computing consumers use the Internet (or other network) to run applications and store data on servers that could be anywhere in the world. The ability to access computing power on a utility basis offers the consumer the opportunity to save costs since costs are shared among all of provider’s users. It also allows them to reduce or remove internally acquired and maintained software and hardware – reducing costs for acquisition, maintenance and potentially IT staff. Cloud servers are generally utilized at a much higher utilization than in house computers because they are shared by so many users, increasing the productivity of the cloud providers and eliminating waste on the users side. Cloud computing providers offer virtualization and provisioning capabilities that may increase significantly the efficiencies with which solutions are available to the end user.
While there are many benefits to cloud computing, there are concerns as well. Security continues to be an issue, driving some organizations to less cost effective private clouds. There are also risks associated with the fact that the technology is still immature and the APIs being used are proprietary, making portability between providers problematic. End users must be able to deal with some loss of control of their IT environment.
The US Federal government agencies have been challenged by the OMB and President Obama to start thinking “cloud first” whenever and wherever it makes sense. And many federal agencies have already started to address that challenge with noticeable improvements in cost and productivity. While there is still immaturity and imperfections in the cloud solutions that are available, there is definitely reason to believe that cloud computing can help both industry and the government do more with less.