WHEN the US Defense Department's John Garing met Microsoft Corp. and Amazon.com Inc. to learn about cloud computing, he liked what he saw. Enough to send him back to Washington ready to change how government technology works.
The companies, along with Google Inc. and Salesforce.com Inc., are promoting cloud computing as a way to boost efficiency and cut costs. The idea is to store applications and information in the companies' data centers, rather than on local servers. The "cloud" refers to the amorphous sources of data outside a customer's internal network.
Garing, who runs the Defense Department's technology infrastructure, is now mimicking the companies' approach internally, developing his own cloud that agencies share. Going beyond that to tap the resources of the corporate world may not be so easy. While using central data servers could save money and protect information from system failures, agencies are hesitant to give up control of sensitive information.
"If I were king for a day, I would say to Amazon and Salesforce, 'Why don't we just use your cloud?'" Garing said in an interview. "We are doing the nation's business here, and the Defense Department can't afford to go down in any way, shape or form."
During a trip to Seattle about two years ago, Garing met with Microsoft chief executive officer Steve Ballmer and chief software architect Ray Ozzie. He also visited Amazon.com to speak with chief technology officer Werner Vogels.
The meetings produced an epiphany, Garing said. By offering computer power over the Internet, the companies could free up their customers from having to pay for their own hardware and facilities.
"People make buying decisions on data processing and don't want to build stuff they don't have to build anymore," he said. "You start adding all this together, do the calculus and soon it says, 'Hello! Why aren't we doing this?'"
Cloud computing is often used to describe services such as Google's online word-processing application and Salesforce.com's customer-service software, which are accessed online through a Web browser instead of stored on a computer.
Customers also can pay to borrow parts of the computing infrastructure of Amazon.com and others, renting it to crunch numbers or build new applications—without having to buy more servers for themselves.
The concept is catching on in the business world. The New York Times Co. has used Amazon.com's cloud service to upload images of archived newspapers and convert them into a more readable format. Nasdaq OMX Group Inc. tapped Amazon.com's service to provide historical trading information.
In both cases, the companies paid only for the computing resources they used. Government agencies could save money and reduce energy consumption the same way, said Drew Cohen, a vice president at consulting firm Booz Allen Hamilton Inc. who works with military-intelligence clients.
The government spent about $68.1 billion in the last fiscal year on technology, with almost a third devoted to infrastructure, according to White House estimates. The portion spent on cloud computing will increase from a "a few percent" of the total this year, Cohen said.
The Information Technology Association of America (ITAA), an industry group whose membership includes Microsoft, has a committee studying how to formalize the process for government agencies to order cloud services. Booz Allen Hamilton has invited officials to a war-game event in March to consider uses of cloud technology.
Google, owner of the most popular search engine, opened a 30-employee office last year in Reston, Virginia, near Washington, to build up business with government clients. Agencies already use its products to allow people to search government web sites.
Cloud computing could be Google's biggest growth opportunity, said Mike Bradshaw, who runs the office along with Vint Cerf, the man who helped create the Internet while at the Defense Department in the 1970s and '80s.
"This one's exciting because you can see how it's really, drastically changing how people approach how to do IT," said Bradshaw, who joined Mountain View, California-based Google in 2006 after working at International Business Machines Corp. and Oracle Corp. "For the federal government, there is tons of interest in it."
The US Navy has already cobbled together guidelines for ordering such services, said Trey Hodgkins, the ITAA's vice president for federal government programs. Ultimately, agencies will look to the Office of Management and Budget and the National Institute of Standards and Technology for guidance, he said.
"Right now we're seeing it evolve as a patchwork effort," Hodgkins said. "There's not any one entity saying this is how it shall work. That's one of the things a lot of people are looking to this administration to help with."
Garing, whose Defense Information Systems Agency (Disa) provides the internal network and computer processing for the military, took his inspiration from the corporate world when he developed his cloud for the department.
Military agencies can contract with Disa to rent storage space and to use its computers for processing information. In an October development test, a user in Falls Church, Virginia, logged onto the network, set up a web site in seven minutes and paid for it with a credit card, Garing said.
"That has fundamentally changed the way we do business," he said. "You virtually don't have to buy another computer in the Defense Department because you can use our servers." (Bloomberg)
If you are a start-up managed service provider, I would recommend taking a look at Amazon Web Services. It is very promising and it helps you host your software on Amazon EC2 (Elastic Compute Cloud), store the data on a networked drive EBS (Elastic Block Store), and backup the data on to the S3 (Simple Storage Service) with an uptime guarantee of 99.95%. All for less than $99 per month. Here's what that means for MSPs.
Numerous software vendors are fueling Amazon Web Services' momentum by releasing public Amazon Machine Instances (AMIs) of their software.
Almost! 
