Obama’s $79 Billion Tech Plan May Favor The Cloud

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By Katie Hoffmann, Bloomberg

Vivek Kundra

Vivek Kundra, the Obama official with $79 billion to spend on technology, said the government can be more efficient by putting programs on the Web, paving the way for companies like Microsoft Corp. and Google Inc. to win business.

The government wants to put data such as health-care pricing information on Internet-based systems as they grow more secure, the U.S. chief information officer said in an interview this week. The U.S. can cut costs by outsourcing that work, said Kundra, who has overseen the federal technology budget since President Barack Obama appointed him last year.

Microsoft, Google and Amazon.com Inc. are all offering more databases and programs online, allowing customers to curb storage costs. Sharing software and data that way would shrink U.S. storage needs, helping to cut expenses after previous governments spent more than $500 billion on data centers and other technology initiatives in the past decade, Kundra said.

“It’s mind-boggling,” said Kundra, a New Delhi native who previously managed information technology for the District of Columbia. “It costs a fortune, it’s duplicative and it’s an energy hog.”

The model Kundra is looking at is known as cloud computing, where users go through the Web to access computers, applications and data instead of through their own servers. He declined to say which companies are best fit to operate government clouds. He noted that Google and Redmond, Washington-based Microsoft have introduced government-focused clouds in the past few months.

‘Darwinian Pressure’

“Let the free markets decide which company is best,” he said. “We want lots of companies with lots of great ideas competing with a Darwinian pressure.”

Global spending on cloud computing may top $44 billion in 2013, according to research firm IDC in Framingham, Massachusetts.

‘“We are excited to see the U.S. federal government embrace the cloud and expect it will further boost confidence among businesses of all sizes to do the same,” Ron Markezich, vice president of Microsoft Online, said in an e-mailed statement.

Cloud computing can give the government “dramatically reduced costs,” said David Mihalchik, who heads federal business development for Mountain View, California-based Google. “All of these things help government employees to collaborate together, be more productive, and the government saves money,” Mihalchik said.

Government Work

Kundra, 35, traveled last week to the West Coast, where he met with companies such as Google and Apple Inc. in California, as well as Microsoft and Amazon.com in Washington, on a 48-hour tour of technology businesses. He said he was impressed by how they created online platforms that allowed third-party software developers to collaborate.

Last year, Kundra created Data.gov, which lets federal agencies post information for the public online and now supports more than 169,000 databases. Other projects, such as those that deal with public safety or health care, also could be put on a cloud, creating a way to share ideas and data at lower costs, he said.

Companies including Microsoft, Google and Seattle-based Amazon.com are seeking federal security certification so they can compete for work within the federal government, he said.

When he managed D.C.’s technology, Kundra moved more than 35,000 municipal employees to Google Enterprise Apps, which provides e-mail, spreadsheet and word-processing programs via the Internet. He said he’s willing to move federal employees to a similar program, if security is proven.

“As long as these companies address security, we’re going to be shifting our resources toward cloud computing,” Kundra said. The government would still own and operate some of its own secure cloud-computing systems.

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