In a post a month ago I said that
…the interrelationships between government and cloud service providers will always go well beyond a simple client-provider one. Contentious points in deciding for or against cloud-based solutions will necessarily include elements such as local economic development (do we attract businesses in our jurisdiction? do we create better opportunities to exploit broadband investments?) and employment both inside and outside government (do we put government jobs at risk if we outsource to cloud-based solutions? do we create opportunities for local businesses to leverage from this?).
Yesterday I had all the above confirmed in a revealing conversation with a director in a shared service organization serving a European province.
They are in the process of re-insourcing infrastructure management after a troubled outsourcing experience. I challenged him saying that this may seem a backward move and mentioning all the conversations I am having with government clients who are looking for ways to get rid of managing infrastructure and for alternative sourcing models, including cloud computing.
He reminded me that for a provincial government it is quite important to ensure that IT service or product contracts have at least in part a tangible return for companies in the province. So, while he realized the potential of cloud computing, he said that it would hardly allow them to control how their spending would benefit local players. So, even if cloud service providers were running servers in the province, and assuming they would offer private cloud services that keep the government’s workloads within the province, they should still be able to demonstrate an impact in terms of purchasing products or services locally.
So, forget remote server management, centrally procured equipment or telecom services and an offshore helpdesk; the cloud service provider may have to deal with enough constraints to make the whole model either unfeasible or too expensive to be a valuable alternative.
This made me reflect because, once cloud service providers look outside of the US federal market or some large national jurisdictions (in non federal countries), they will hit these problems. They may not be formulated as clearly and explicitly as our client did, but would manifest themselves through procurement constraints or preferences of sort, or would simply lead potential cloud service clients not to consider the option.
The links between best value procurement and industrial policy are quite complex and need to be factored in by all those who believe that cloud computing is such an appealing proposition that government clients simply “can’t refuse it”. Until vendors will be able to spread the benefits of their cloud services to the jurisdictions they serve, they’ll have a hard time selling into them. Compliance with security, availability, e-discovery and other requirements may prove not to be enough.