During the Saleforce.com Dreamforce event in San Francisco, CEO Marc Benioff sat down with some of the leaders in the industry to talk about Cloud computing and governance in the digital age. The panel was made up the former US federal government chief information officer, Vivek Kundra, the vice-president of the European Commission responsible for the Digital Agenda, Neelie Kroes, and Burberry chief executive officer, Angela Ahrendts.
The four leaders discussed various issues during the course of the wide ranging conversation, including best practice for Cloud computing by governments and the importance of human rights. In part 1 of this series, CIO Australia brings you an extract of the conversation between Benioff and Kundra.
Mark Benioff: I believe that this is the seminal issue to really propel Cloud computing going forward. And when we look at the old models, they were all about the data center.
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In the new model, the cloud computing model, it’s a shared model, and in many cases you are outsourcing that idea of who’s managing information to a trusted organisation. What policies do they have in place? What procedures do they have in place? Who are their employees?
Vivek, I’d like to start with you. You published this great piece in the New York Times. What inspired you to write that? What is your vision around the Cloud and Cloud First, as you call it?
Vivek Kundra: Sure. Mark, as I’d worked in various roles within the public sector … one of the things that I’ve noticed is the vast inefficiencies in how we spend taxpayer dollars, hard-earned taxpayer dollars. In the federal government alone, we spend $80 billion a year and one of the most frustrating issues was to actually see project after project fail because it’s based on the old IT model. And that model was essentially, vendors would bid for government contracts and the expertise wasn’t superior technology or innovation, it was the fact that they had a PhD in understanding how to navigate the complicated procurement process. All of a sudden the government would award these multi-million, multi-billion dollar contracts and if you fast forward and you ask: What value did you get, two, three, five, 10 years in some cases? And there is negative value.
I’ll give you a data point. The Department of Defense spent 10 years and $850 billion trying to implement a personnel system — and there’s nothing to show for it a decade later. We cannot continue on that path in this tough fiscal environment that we’re in. That is why, as part of the administration, we instituted a Cloud First Policy, recognising that some of the most amazing innovation is happening, not within the old model of what I would call the IT cartel, where people to continue to win these contracts and their objective is essentially to put in as many people as possible and build at exorbitant rates.
We cannot continue and we need to make sure that, as governments around the world are facing these tough economic times, that we do find an innovative path in terms of how we serve our citizens more acceptably.
Benioff: As CIO of the federal government, one of the things you were really taking on was how many data centers and islands of information in the federal government. Could you give us some insight into that? What does the US federal government architecture look like? How many data centres are there, and what do you think the opportunity is for cost reduction?
Kundra: Well there are over 2000 data centres within the United States government. In 1998, there were 432. So it literally went from 432 data centres to 2094. On top of that, there are over 12,000 applications — major applications — across the federal government. So on infrastructure alone, we spend about $24 billion every year. Think about where all that money is going and think about how we actually serve our constituents. Because all that money’s being spent on redundant infrastructure, on redundant applications that we’re not able to optimize the experience of the American people have with their government because all the money is being spent in the wrong places.
Benioff: So what do you think the government should be doing?
Kundra: Well, we’re already seeing it. With the Cloud First Policy, we’ve already seen agencies such as GSA, we’ve seen the Recovery Board and USDA adopt a Cloud First policy. [Take] something as simple as e-mail; we’re able to cut the cost down to $42 million by moving it to the Cloud. And imagine the opportunity as we look at applications across the board. We projected that we could move, in the next couple of years, about $20 billion worth of IT projects to Cloud, saving the federal government $5 billion, very, very quickly.
Benioff: Now, you’ve inspired us, and I was fortunate to chair something which TechAmerica commissioned to look at the best practices for governments to move into the Cloud and we’ve published a Cloud buyers guide…which is how governments can move into the Cloud. It’s kind of this independent commission of government and computer scientists and others to make those recommendations.
If you were to do one key thing, what would you do today if you were a government? I mean, obviously governments seem like they move more cautiously. How do you think governments should look forward in that one key area?
Kundra: Well, I think part of what is about to happen in the coming months and years, is that there’s going to be intense downward pressure as a result of budgets that are going to be cut.
And what you’re seeing across the board is agencies, whether they are at the federal, state or local level, are having to zero-out their capital expenditures. So when you move away and you take away all the capex, you are left with opex. How do you innovate in that space?
What I would encourage is every government — internationally and domestically — to start thinking about how … we do actually much more with less? That’s the environment and reality we find ourselves in and I think in the coming years and months ahead, you’re going to see a major shift to Cloud.
Benioff: These are very forward-thinking comments and aggressive comments, I think. So when you’re delivering those comments inside the US Federal Government, what is the reaction that you get from lawmakers or from administration personnel?
Kundra: Well, there are different types of CIOs that you meet within the government.
Benioff: I’m familiar with that.
Kundra: Some of them are very innovative, forward-thinking and they’re the ones who’ve embraced this agenda and are driving forward very, very aggressively.
In other areas, what you get is a false choice; people erect these barriers around security and privacy, which in some ways are very unfounded. And the reason I think they’re unfounded and ridiculous in a lot of ways is because the United States government already has outsourced over 4700 systems. These systems are already in the hands of Lockheed, Raytheon, Boeing, Northrup-Grumman — you name it. Yet when it comes to Cloud, for some reason, these fears are raised. The government engaged in contracting language and these contracts are designed to make sure that those provisions are taken care of.
So we have worked very, very hard to move forward in that direction. And we’re actually seeing massive adoption of Cloud technologies across the board.
Georgina Swan travelled to Dreamforce as a guest of Salesforce.com