Can Government and Providers Play Nice with Public-Private Partnerships?

Written by Joe Kozlowicz on Wednesday, December 2nd 2015 — Categories: Cloud Hosting, Colocation, Security

federal government buildingLike many data center providers, Green House Data works closely with government organizations large and small. In the past few years this trend has accelerated dramatically, as the federal government pursues data center consolidation projects and government CIOs, like their private counterparts, realize the attractive flexibility and ease of use found in the cloud.

Early this year, Department of Defense CIO Terry Halvorsen even mentioned his intent to pilot a public-private partnership, where private hosting companies operate within a highly secure DoD data center. What might a public-private partnership for IT services look like, and how else can government organizations and hosting service providers cooperate to reach their respective goals?


Data Centers as Economic Development

Data centers have become a popular prize for government leaders and business development organizations across the nation, with twenty or more states offering some form of incentive specific to data centers. These can include sales tax breaks or even cash grants, all designed to entice new data center builds.

Sometimes data center incentives come with contingencies, like the creation of a certain number of jobs, a requirement to remain in the state for a predetermined length of time, or a guaranteed investment in the local economy. This isn’t a public-private partnership per-se, but it is a nice exchange of back scratching that benefits both parties. Local municipalities get a few jobs, but more importantly, an investment in vital infrastructure.


Increasing Government Use of Private IT Services

Starting in 2010, the federal government began consolidating, eliminating, and streamlining its data center operations across all agencies. The overall savings are expected to reach $3.3+ billion. As part of this initiative, cloud service providers are also being adopted.

Speaking to FedTech magazine, EPA CIO Ann Dunkin estimated they were using over half a dozen different cloud providers. A big part of this shift will be hybrid cloud, as sensitive government information must be linked to—but can not be stored in—these new offsite hosting environments.

Local and state governments are looking towards the cloud, too. Our own home state of Wyoming made some waves last year as it migrated many systems to the cloud (and colocated a few with Green House Data).


The Flip Side: Public-Private Deployments

On the opposite side of the increased government use of private companies for IT infrastructure is the idea put forward by DoD CIO Halvorsen, in which a private company would offer data hosting and distribution services from a government data center facility. This would offer security benefits to the provider while giving the government agency operating the data center additional investment in telecom and compute infrastructure, helping to cut capital expense on their side.

There are numerous hurdles to this option, not the least of which is questionable legality. It may even require additional legislation due to current protections for government data. There is also additional cost and time investment on the provider side to adhere to stringent security standards even beyond FedRAMP.


The Surveillance Conundrum

A public-private situation as described above might make many companies, especially international ones, pretty nervous. Post-Snowden, we’ve seen data sovereignty become a major issue in the hosting space, and even domestic companies are concerned with government backdoor access to their infrastructure. If hosting environments were delivered to private organizations from within a government facility, those concerns would be even more legitimate.


Public-private partnerships have had a somewhat checkered past. It can seem that for every success story where the government body saves money and personnel and the private company finds a new revenue stream, there is a disaster that does neither, and worse, leaves the public without vital services. Perhaps data centers can come out on the better end of these two extremes, but we’ll have to wait and see how experiments like Halvorsen’s pan out.