Friday, June 15, 2012

Microsoft’s Big Win in the Government Cloud

InvestorPlace

by Susan J. Aluise | June 14, 2012 9:40 am

“Above the cloud with its shadow is the star with its light,” the ancient philosopher and mathematician Pythagoras famously said. Just so, the Federal Aviation Administration’s move to Microsoft’s (NASDAQ:MSFT[1]) cloud service may not only streamline the agency’s email, it may help jump-start a system to guide airliners home more safely and less expensively.

It doesn’t hurt that the deal also gives MSFT a much-needed win over government cloud rivals like Google (NASDAQ:GOOG[2]) and Amazon (NASDAQ:AMZN[3]).It all started when FAA prime contractor Computer Sciences Corp. (NYSE:CSC[4]) received a contract worth as much as $91 million (one-year with a six-year option) to implement Microsoft’s Office 365 email and collaboration suite inside a secure private cloud. The contract is a natural outgrowth of the federal government’s “Cloud First” policy[5] announced last year.CSC will migrate 60,000 FAA employees and 20,000 Transportation Department (DOT) employees — who currently use a crazy quilt of government email systems — to Microsoft 365. Instead of installing software on physical servers, the Microsoft applications are delivered “as a service,” an approach that’s more economical and allows access from anywhere, on virtually any device.

But the FAA settled on implementing Office 365 in a private cloud, instead of using Microsoft’s new Office 365 for Government — a multi-tenant service similar to Google Apps for Government and Amazon Web Services’ GovCloud.
FAA’s move to the cloud will do a lot more than provide less expensive, broader access to employees’ email. Achieving better collaboration throughout the agency will be essential in implementing the FAA’s new National Airspace System. This plan, known as the Next Generation Air Transportation System[6] (NextGen), is a multi-year, multi-billion-dollar program to upgrade the nation’s aging air-traffic-management capabilities.NextGen will be a boon for airlines like Delta (NYSE:DAL[7]), United Continental (NYSE:UAL[8]), US Airways (NYSE:LCC[9]), American Airlines (OTC:AAMRQ[10]) Southwest (NYSE:LUV[11]), JetBlue (NASDAQ:JBLU[12]) and others because it will make flying into busy airports easier, safer and more fuel-efficient.

And since fuel accounts for as much as 40% of airlines’ operating costs, it could increase the industry’s razor-thin margins and potentially boost share prices.But NextGen can succeed only if the FAA can get the right information to the right person at the right time. It depends on “coordination with, and support from, FAA specialists on safety, airports, the environment, policy development and the other building blocks of modern air traffic management,” according to the agency’s NextGen implementation plan[13].
CSC already has a tight relationship with the FAA: It has been building new capabilities into the National Airspace System since its first contract with the agency 40 years ago. Hosting the Microsoft cloud solution further enhances that relationship.

So what does all this mean for investors? Here are four takeaways:
1. The FAA contract helps Microsoft in its duel against Google. The stakes are huge as cloud vendors scramble to capture the biggest share of the federal government’s nearly $80 billion IT services business. Microsoft needed this win after Google prevailed in a $35 million contract with the Interior Dept. last month. The two companies have been dueling over that contract in court since 2010[14].

2. It shows the government’s concern about security. The FAA opted for a CSC-hosted private cloud rather than use MSFT’s new “community” cloud, which raising questions about Microsoft’s Office 365 for Government. Federal agencies clearly have a low comfort level for sharing cloud space with other agencies and organizations — no matter how much security is provided.

3. CSC is poised to gain a big edge with the private cloud. This $91 million contract illustrates the value of quickly being able to bring highly functional, collaborative applications like the Office 365 suite to a secure private cloud. New CSC CEO Mike Lawrie[15] may be shaking up the company, but CSC hasn’t lost its focus on the hot government cloud niche. The FAA contract, combined with CSC’s existing BizCloud (an on-site private cloud that can be up and running for government users in just 10 weeks), has the potential to be a game-changer.

4. The FAA’s collaborative cloud could jump-start NextGen. The faster NextGen takes off, the better it will be for airlines. But NextGen is behind schedule as the agency struggles to coordinate multiple ongoing efforts. Greater collaboration through the cloud could be just what the plan needs to fly.
Bottom Line: The federal government’s “Cloud First” policy will create huge efficiencies for agencies — and cause the cloud providers’ stars to rise or fall. The companies that best align their strategies with federal agencies’ requirements will win what counts most: a bigger piece of Uncle Sam’s nearly $80 billion IT pie.

And that should do go a long way toward lighting up shareholders’ returns.
As of this writing, Susan J. Aluise did not hold a position in any of the stocks named here.

Wednesday, June 13, 2012

Cloud Migration Hits 10,000 Mail Boxes – State’s E-mail Migration Is Successful

In March, the Department of General Services (DGS) successfully migrated 3,300 mail boxes to the California Email Service (CES), a cloud software solution. This was the first large State Department to migrate under AB 2408 (Smyth/2010) which requires all executive branch state departments under the Governor’s control to consolidate e-mail systems, servers and networks to reduce redundancy, save energy and streamline delivery of IT services. It requires the consolidation of 130 separate e-mail systems, all with their own hardware, software licenses and maintenance requirements into just two systems: CA MAIL offered by the State Office of Technology Services and CES offered by a private cloud vendor utilizing the Microsoft Exchange platform.  As of June 1st, 2012, there are more than 10,000 CES mail box migrations including numerous state departments, boards and commissions that have made the move. In addition to the 3,300 mb’s at DGS, the Department of  Consumer Affairs (2,300 mb’s) has also migrated so not only the smaller offices are migrating but large departments as well.  This is very significant and shows OTECH and the state making real measurable progress. Feedback from the departments has been very positive with most indicating that few to no glitches were part of the migration.  “We fully support the vision in the state’s 2012 IT Strategic Plan and the migration of 10,000 mail boxes to CES has demonstrated the promise cloud computing offers” – Andrew Armani, Agency Information Officer of the California State and Consumer Services Agency.  Since AB 2408 was enacted, ninety percent of all state departments have elected to use CES for their departmental e-mail service and when fully implemented, 66 state departments and over 100,000 state mail boxes will utilize CES for email, making it one of the largest cloud email systems in government today.

Tuesday, June 12, 2012

You Got Mail: State Migrates 10,000 Mail Boxes To the Cloud

You’ve got mail: Looking at the state migration.

By Thomas L. Sheehy | 6/12/12 12:00 AM PST

Last month on May 23rd at the Ziggurat Building in West Sacramento, the California Office of Information Technology (OTECH)  hosted agency information officers (AIOs) and departmental chief information officers (CIOs)  from various state agencies across the executive branch for an Executive Forum to get updates in the progress of the California Email System (CES) and to hear first hand the experiences of the early adopting agencies. A big news item was the announcement that CES has now successfully migrated over 10,000 mail boxes encompassing both large and smaller departments. CES is one of two e-mail solutions available to the Executive Branch departments pursuant to AB 2408 legislation of 2010.  Since AB 2408 was enacted, ninety percent of all state departments have elected to use CES for their departmental e-mail service.
AB 2408 consolidated state information technology functions under the Office of the State Chief  Information Officer and required all executive branch state departments under the Governor’s control to consolidate e-mail systems, servers and networks to reduce redundancy, save energy and streamline delivery of IT services. The legislation requires the consolidation of 130 separate e-mail systems, all with their own hardware, software licenses and maintenance requirements into just two systems: CA MAIL offered by  OTECH and CES offered by a private Cloud vendor utilizing the Microsoft Exchange platform. It took one year to build the service for the state and some departments have more pre-migration planning and remedial work to do in order to consume the service, but  the major milestone of migrating 10,000 boxes successfully shows how the state of California is innovating in IT services under  OTECH’s leadership and the leadership of AIOs and CIOs around the state. Two of the major departments and some smaller entities that have already migrated are in the  State and Consumer Services Agency (SCSA) including the Department of General Services (3,300 MBs) and Consumer Affairs ( 2,300). “We fully support the vision in the state's 2012 IT Strategic Plan and the migration of 10,000 mail boxes to CES has demonstrated the promise cloud computing offers” - Andrew Armani, Agency Information Officer of the SCSA.  When fully implemented, 66 state departments and over 100,000 state mail boxes will utilize CES for email, making it one of the largest Cloud email systems in government today.

Migration to CES  delivers the benefits of reducing  state costs for the maintenance of unused mailboxes, elimination of unneeded software licenses, and reduced capital expenditures for equipment replacement and related upgrades. The reduced IT foot print  will significantly lower energy costs and space requirements. When consolidation is completed,  Governor Brown can communicate more directly with state employees via e-mail -  an ability his predecessors have lacked.
During the OTECH Forum, state executives, project management and technical leaders were able to talk openly about their experience migrating to CES and to compare and contrast experiences and share important tips with each other. The various panel presentations were designed to share lessons learned along the way. The Forum concluded with an open question and answer period with IT managers  from the early adopters and the CES project team.  Finally, closing remarks were made by new the new Chief at  OTECH, Jeff Uyeda.

Tom Sheehy is the former Chief Deputy Director of Finance
and Acting Secretary / Undersecretary of the State and Consumer
Services Agency under Gov. Arnold Schwarzenegger. He joined
Greenberg Traurig's Sacramento government affairs practice
in October 2010 (http://www.gtlaw.com/People/ThomasLSheehy).

Wednesday, June 6, 2012

June 5th California Primary Election Results

Anybody who thought that redistricting and a top two primary system would dislodge incumbents will wake up this morning sadly disappointed.   Every sitting legislator who ran for re-election to his/her current seat, or who ran for another legislative office in the Senate or Congress made the cut to advance to the November run-offs.  Where big bucks were spent to unseat an incumbent, AD 33 (Donnelly), AD 50 (Butler), and AD 74 (Mansoor), nothing came of it.
 
In the contested Senate races:  SD 5, Berryhill handily beat Ornellas to place second behind Galgiani.  SD 19, Stoker first, followed by Jackson, with the rooky Hodge a very distant third.  SD 27, political novice Zink narrowly nosed out Pavley, an outcome that should encourage GOP leaders to up their bet there.  SD 31, Steinberg's handpicked candidate Roth swept by Clute to place second and will face Miller in November.
 
In contested Assembly races:
 
AD 3 --  Columbo Logue survived a same party challenge and will runoff against the Dem.
AD 5 --  Two Reps, Rico Oller and Frank Bigelow, will clash in the general.
AD 6 --  Gaines first; Dem Bronner and Rep Pugno too close to call for second.
AD 8 --  Cooley first; too close to call between Ortega and Tateishi.
AD 10 -- Two Dems, Allen and Levine, made the cut.
AD 11 -- Oakley Mayor Frazier meets Suisun City Mayor Hudson.
AD 18 -- Bonta and Guillen, both Dems, head to November.
AD 23 -- Former Fresno Mayor Patterson first; second spot too close to call between Dem Rojas and Fresno DA Whalen.
AD 32 -- Dem Salas first; Connie Conway's handpicked successor to Valadao (McQuiston) lost to Rep porta-pottie business owner Rios.
AD 33 -- Easy win for Donnelly over Big Bear Lake Mayor Jahn; SEIU attacks on Donnelly boosted Dem Coffey.
AD 36 -- Too close to call; two Reps Lackey and Smith and Dem Fox split the vote almost equally.
AD 38 -- Wilk will face the Dem Headington in November.
AD 39 -- Alarcon and Bacanegra will clash again in November.
AD 41 -- Holden will face tea party favorite Lowe in the runoff.
AD 44 -- Gorell ran better than his registration and gets the weaker of the two Dems (MacEnery) in November.
AD 47 -- Two Dems, Baca Jr. and Brown, go another round in November.
AD 48 -- Hernandez' DUI hurt, he came in second to an unknown Rep!
AD 49 -- Rep orthopedist Lin gets 51% against two Dems in a 25% GOP district.
AD 57 -- Negative campaigns of Bermudez and Calderon give the top spot to Rep Jaimes.  Second place too close to call.
AD 58 -- Negative campaings of Calderon and Marquez give the top spot to Rep. Kotze-Ramos and #2 to Dem math professor Christina Garcia.
AD 66 -- Dem DA Muratsuchi will clash with Rep marketer Huey in a toss-up November contest.
AD 67 --  Two Reps, Paule and Melindez, square off in November.
AD 69 -- Dem Daly wins first easily; faces Rep Moreno who tried to drop out of the race and may be ineligible to run because of Hatch Act issues.
AD 74 -- Rep Edgar will face Dem Dovinh in the runoff.
AD 76 -- Two Rep runoff; Chavez first and Hodges second.
AD 79 -- Crowded Dem field lets Rep England take second, she will face communications professor Shirley Weber in November.
 
Compliments of Parke Terry