Consolidated Power

Private cloud based on Oracle engineered systems helps 300,000 government employees serve 25 million Texas citizens.

by David Baum

As IT funding challenges ripple through the public sector, government organizations are experimenting with cloud solutions as a way to deliver technology capabilities more quickly and efficiently. Cloud vendors promise to minimize capital expenses associated with procuring, implementing, and maintaining IT resources, allowing technology services to be funded out of operating budgets.

However, many cloud business models have been created for the private sector and are not suitable for public organizations (see the sidebar “Getting Cloud Right for the Public Sector”). “Not all cloud providers understand the constraints of the public sector,” says Peter Doolan, group vice president, Oracle Public Sector. “Public cloud vendors typically want payment for capacity up front, often via credit card. Many states can’t work that way.”

State of Texas

State of Texas

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For example, in Texas state agencies pay only for services that they have consumed. To help the state work within its legislative confines, Oracle is working with Xerox and Capgemini to develop a unique charge-back model that allows the partners to deliver and bill for services from a multitenant, private cloud environment. The team utilized Oracle’s enterprise architecture principles to take a close look at the state’s business processes, technical architecture, and information systems, and then devised a portfolio of services that they could lease back to the state.

“In order to transform IT, we need platforms that let us share the cost across a wide base of users, and also share resources in an elastic fashion,” says Todd Kimbriel, director, eGovernment, Texas Department of Information Resources (DIR). “The Oracle enterprise architecture team started with a transform exercise that formed a cornerstone of our business strategy. The charge-back element is very important because it gets us to one number. This simplifies the service and makes the business case easier to understand.”

Texas is now setting an example for other state governments throughout the nation by utilizing a private cloud that offers cost-effective, cutting-edge technology while fulfilling state government mandates. Instead of a flat pricing structure, where the capital costs are divided up and paid back in full over a few years, the cost of the platform is commensurate with the use of the platform. Each department and agency pays only for the capacity it uses. As the cloud management brokers, Xerox and Capgemini own the IT assets and lease them back to the state.

Karen Robinson, executive director, Texas DIR, and CIO for the State of Texas, sees similar trends throughout the country. “State agencies have unique responsibilities and missions, so many of them have set up their own IT infrastructure,” she explains. “As budgets get tighter, and we are all charged to do more with less, all the state CIOs are looking for opportunities to consolidate and set up sustainable platforms and technologies that can be utilized and shared.”

The Road to Shared Services

Texas DIR provides statewide leadership and oversight for management of government information and communications technology. The department supports 125 agencies and 45 higher-education organizations, each with its own CIO and IT group. One of Texas DIR’s leading programs is the Data Center Services program, which was launched to rationalize tens of thousands of information systems—from simple bookkeeping applications to critical public safety platforms. The program focuses on shared services and shared platforms based on engineered systems such as Oracle Exadata, managed with Oracle Enterprise Manager Cloud Control.

We are transforming technology throughout the state. we saw Oracle as a partner that would be with us for the long haul.

“We had many Oracle Database instances, both in virtual machines and in dedicated servers across our data centers, and that’s a very expensive way to consume information,” admits Carl Marsh, COO, Texas DIR. “The Oracle Exadata platform allows us to aggregate our demand, put it on an Oracle-focused virtualized infrastructure, and reallocate existing infrastructure. The goal is to help customers consume IT services in a cost-effective manner without having to make large investments up front by standing up systems that they are not necessarily going to use.”

So far the state has implemented two Oracle Exadata Database Machines, one in its Austin data center and the other in its San Angelo data center. The systems are architected to be highly redundant and available, with one platform replicating to the other as a “hot standby” for business continuity and disaster recovery purposes.

“Oracle’s concept of engineered solutions is critical to our approach to delivering IT services,” says Kimbriel. “Instead of having to select and pull together a multilayered technology stack, it is all embedded and integrated within the fabric of the device. It’s faster for developers and technical staff, it’s more elastic, and you can easily add or contract capacity. We think engineered systems like Oracle Exadata are absolutely the way to go.”

Apparently, much of the State of Texas thinks so, too. Twenty-eight agencies have signed up to use Texas DIR’s Oracle Exadata–based cloud services, including the Texas Education Agency, Texas Health and Human Services Commission, the Texas Department of Assistive and Rehabilitative Services, the Texas Department of Family Protective Services, the Texas Department of Insurance, and the Texas Department of Public Safety.

Now that the database consolidation effort is well under way, the Oracle enterprise architecture team is looking at the state’s software applications. One of the major goals is to eliminate redundancy and enforce standards among versions and operating environments. For example, when the team examined usage of Oracle’s PeopleSoft applications handling HR and finance, they discovered nearly 100 implementations throughout the state, many with unique customizations and little standardization regarding the versions, platforms, and management procedures.

Leaders at Texas DIR decided to use the cloud technologies within the Oracle Exadata and Oracle Exalogic lines to provision a shared “PeopleSoft-as-a-service” environment that the agencies can consume in a simple, straightforward way. “Shared services require a complete platform,” says Kimbriel. “We began with Oracle Exadata, we plan to adopt Oracle Exalogic after that, and we are considering using Oracle Exalytics for business intelligence.”

Oracle’s Doolan says Oracle staff have been working hard to help the state create a reference architecture that is standard, sustainable, and scalable. “We didn’t want to simply take all of the existing PeopleSoft implementations and virtualize them into a big Oracle Exadata box and declare victory,” he notes. “Instead, we decided to reengineer the underlying business processes so that the departments weren’t dependent on customized software. We spent at least eight months in pure architecture mode before we ever cabled up a single computer. Now the state can enjoy a much lower cost of ownership for its PeopleSoft implementations.”

PeopleSoft is just one of the business systems that is ripe for consolidation. Texas Health and Human Services relies on Oracle’s human capital management solutions to track benefits for thousands of employees. The Texas Department of Insurance uses Oracle Insurance solutions to manage driver records and licensing applications. The Department of Public Safety standardized on Oracle Identity Management to authorize access to sensitive IT resources. The Texas Department of Family Protective Services uses an Oracle database to track offenders and issue background checks. All of these information systems can be offered as cloud services and migrated to Oracle engineered systems.

State CIOs are looking for opportunities to consolidate and set up sustainable platforms and technologies.

Lessons Learned

Marsh believes cloud environments make sense for applications that require rapid deployment, have variable storage needs, need elastic capability, and use virtual servers rather than physical servers. However, he cautions IT professionals about the transition, saying that cloud utilization does not eliminate the need for expertise in software licensing, system integration, firewall rules, virtual private network (VPN) connectivity, or security. Also, public sector customers cannot assume that cloud providers will be able to comply with their required level of business continuity. Appropriate governance processes must be in place to manage these fundamentals and ensure that all of an organization’s application needs are met.

Marsh also likes to emphasize the environmental benefits of consolidation: fewer servers used, less floor space needed, less energy expended, and reduced power and cooling costs. Deploying Oracle Exadata and other engineered systems will enable the state to consolidate 28 data centers into 2 data centers—and that’s just phase 1. Ultimately, the state would like to consolidate more than 600 data centers statewide.

Kimbriel is optimistic about the popularity of the cloud platform because of the emphasis his team has placed on IT fundamentals. “Our cloud services are agile and priced very attractively,” he says. “They are also flexible. We have been careful not to lock customers into a rigid cloud model. Customers pay one price. They don’t have to think about standby databases and disaster recovery; that’s all built in.”

Smaller agencies such as the Texas Ethics Commission and the Texas Lottery Commission may not have the budget to implement these advanced technologies. The state’s cloud technology environment can completely change how they consume IT services.

“They can take advantage of information systems and infrastructure that they could never touch before,” concludes Kimbriel. “We are not going to the agencies and selling technology. We are selling a strategy that will increase demand. The more agencies participate, the lower the price will be for all. We are not looking to create solutions for the next year or two,” he adds. “We are transforming technology throughout the state. We saw Oracle as a partner that would be with us over the long haul.”

David Baum is a freelance business, technology, and lifestyle writer in Santa Barbara, California.

    • Texas Department of Information Resources
    • Location: Austin, Texas
    • Industry: Public sector
    • Employees: 180
    • Budget: US$240,735,442 in 2012
    • Oracle products: Oracle Exadata Database Machine; Oracle Database, Enterprise Edition; Oracle Enterprise Manager; Oracle Active Data Guard; Oracle Real Application Clusters; Oracle Cloud Management Pack for Oracle Database; PeopleSoft Financials; PeopleSoft Human Resources; PeopleSoft Payroll
Snapshot Carl Marsh
  • COO
  • Length of tenure: Two years
  • Education: BA in business management and communications, Southeastern Oklahoma State University
Public Sector Cloud

Getting Cloud Right for the Public Sector

While cloud services are generally expected to reduce costs and increase efficiency for government organizations, uncertainty about vendor contracts and the operational components of cloud services have been a barrier to broad adoption. State government payment laws are not always consistent with the payment requirements of cloud providers, which are typically based on the needs of the private sector. Typical cloud models include

Pay-as-you-go pricing, in which customers pay for hourly use of various combinations of CPU, memory, storage, and network capacity. Customers are billed as they use capacity and resources. This is the model that works well for government agencies, especially with an infrastructure partner or cloud management broker to absorb the capital costs.

Subscription models that involve prepayment for fixed capacity in monthly or yearly increments. The cost is often lower than the pay-as-you-go model because it is prepaid. However, state laws don’t always allow for this type of advance payment because the laws are designed to consume services in arrears.

Reserved capacity pricing models that define a specific amount of CPU, memory, storage, and network capacity that is dedicated and always available to the customer. This model has the advantage of consistent pricing on a month-to-month basis, but it can lead to excess capacity and thus costs that are higher than necessary. This can be a showstopper for agencies with tight budgets.

Cloud Advantages

With the right model in place, public sector organizations can enjoy the many benefits of cloud computing that are gaining momentum in the private sector:

  • Reduced cost. Agencies can scale back or eliminate expenses and effort related to ongoing IT maintenance, support, and other operations.
  • On-demand services. Agencies can set up cloud computing services instantly, avoiding long procurement cycles.
  • Pay-as-you-go pricing. Agencies pay only for what they use.
  • Rapid scalability. Agencies can rapidly increase capacity during peak usage periods, and then scale down as needed.
  • Improved administration. Agencies can reduce time spent on routine administrative tasks such as configuration management, manual troubleshooting, software updates, and backups.
  • More options. Agencies can customize their solution through an increasing number of service providers, gaining performance and price advantages.
  • Enhanced reliability. Agencies can provision disaster recovery and business continuity services.
  • Improved funding models. Agencies can significantly reduce capital expenditures for IT hardware and software and shift to an operating expenditure arrangement.
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