Government eyes big savings with first cloud service online storefront where federal agencies can buy online apps and basic computing services is now up; Google is also eyeing government cloud services

White House CIO Vivek Kundra unveiled the first service in the U.S. government's new cloud computing initiative on Tuesday, launching a new Web site where federal agencies can buy online apps and basic computing services.

Run by the U.S. General Services Administration, is an online storefront where government agencies can buy online applications from companies such as Google and IT services such as storage, Web hosting, and virtual machines will eventually be offered here as well.

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Speaking at a press event at NASA's Ames Research Center Tuesday, Kundra said that the government could save a lot of money by using many of the Web-based and cloud technologies that are already available to consumers. It costs the U.S. Transport Safety Administration (TSA) $600,000 to set up a blog, he said. By contrast, consumers can get a Blogger account free.

"If in our lives, we can go online and provision Webmail within a matter of minutes, why must the government spend billions and billions of dollars on information that may not be sensitive in nature?" he said.

Kundra is hoping that the cloud will provide a way to streamline the government's annual $75 billion IT spending by using cheaper commercial hosting services and by using virtualization technologies to load more applications onto its servers.

Following up on Tuesday's launch, the government will roll out a number of pilot projects in 2010, making lightweight applications available to users. By 2011, federal agencies will start getting guidance on how they are expected to move to the cloud.

"There is a whole class of the solutions that can be deployed within the federal government, where we can literally leverage some of the consumer technologies that are out there," Kundra said.

Observers say that the government could clearly save money by moving to Web-based apps and consolidating datacenters, but Kundra is going to have to overcome some major obstacles as he moves forward.

"There will be resistance for years to come, predicated upon culture," said Bruce Hart, the chief operations officer with datacenter company Terremark Worldwide, who was previously deputy CIO with the U.S. Central Intelligence Agency.

Another major issue will be security. Many agencies will be reluctant to move sensitive data to computers that are outside of their control. "We're going to see the word 'security' used as the counter-ammunition to his initiatives," Hart said.

Kundra agreed that it will take work to make cloud computing succeed in the federal government. "This is not going to happen overnight," he said. "It's going to take a number of months to years to address some of these deep-seated policy issues and technology issues."

Technology companies like Terremark stand to make a lot of money from this initiative.

"Increasingly, we're going to find ourselves hosting larger applications and systems for larger organizations that need to move a big chunk of their stuff," into virtualized or cloud computing environments, Hart said.

The Web site might be a small step for the government, but "it is, however, setting the stage for what could be a stunning achievement," he said.

Google is also looking for a bigger piece of the action. On Tuesday it said it would offer its own government cloud products beginning next year. The company expects to have Google Apps certified under FISMA (Federal Information Security Management Act) by that time, and will host it in U.S. datacenters that are run by staffers with appropriate security clearances.

"The U.S. government is probably the largest enterprise I know of," said Google cofounder Sergey Brin, speaking with reporters at NASA Tuesday.

Copyright © 2009 IDG Communications, Inc.