Dan Chenok’s House Committee Testimony: Innovation and Cloud Computing

The following was originally posted by Dan Chenok, the Executive Director of the IBM Center for the Business of Government.

I am testifying today before the U.S. House Judiciary Subcommittee on Intellectual Property, Competition, and the Internet. I outline how Cloud computing can transform our society and government, save money, and increase efficiency and effectiveness.

Here are the top five benefits I will discuss at the hearing:

• Cost Saving. Cloud computing allows customers to pay for just the computer resources they use. They can avoid both a large initial upfront expenditure in hardware and software, and ongoing operating and maintenance expenses for their own IT. Resource usage can be monitored, controlled, and reported in a transparent way for both the provider and consumer of the cloud service. Indeed, a Brookings Institution study found that “… agencies generally saw between 25 and 50 percent savings in moving to the cloud”; this same report refers to other studies which claim savings from 39% to 99%.
• Increased Effectiveness. Network outages are an ongoing challenge for IT departments. Cloud computing can offer a higher level of service and reliability, reduce the harm that can come from network outages, and provide for a more immediate response to emergency situations by enabling real-time transfer of IT services to areas that are not affected by emergency.
• Optimized Computing Usage. IT service providers see cloud computing not only as a means to better serve their customers, but also to optimize data center usage. In many centers, only a small fraction of computing capacity is used at any time; the remaining capacity sits idle. Cloud enables flexible scaling across customers based on demand, which increases capacity and cost-effectiveness.
• Energy and Environmental Improvements. While most computers and servers are certified as energy efficient, cloud takes green computing one step further — decreasing electricity use, slashing carbon emissions, and reducing IT costs through cost-effective use of computer and network infrastructure. Cloud also opens avenues for telecommuting (e.g., through internet-based email), which brings added environmental benefits.
• Innovation and Transformation. Cloud computing can help to spur innovation and transform operations. In the next several years, the use of the cloud to pave the way for business model innovation is likely to increase significantly – innovation that includes entering new lines of business, reshaping an existing industry, or transitioning into a new business role.

Cloud also can fundamentally transform how federal agencies share information and help employees become more effective in their use of IT, which was noted by both the current and previous Federal Chief Information Officers at the Office of Management and Budget (OMB). The Federal government is already realizing the benefits of cloud computing based on work done by OMB and the General Services Agency (GSA) Federal Risk and Authorization Management Program (FedRAMP) program.

The cloud holds great promise to reduce costs, improve performance and drive innovation. Government leaders can help by promoting sound implementation, strong security, and leveraging the global nature of the cloud. Greater education, investment and appropriate incentives will allow government and businesses to realize the significant benefits of the cloud.