Large government contractor shutters cloud computing service and $200 million data center, less than a year after opening.
Federal Data Center Consolidation Makes Progress
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Systems integrator Harris Corporation announced Monday that it plans to shutter a secure public cloud computing service it began offering just last year, citing customers' preferences to keep "mission-critical" applications on premises.
Harris launched its Cyber Integrated Solutions in spring 2011 from a $200 million refurbished, 140,000-square-foot data center in Harrisonburg, Va., claiming that its offerings would be able to host sensitive data in the cloud. Now that bet is backfiring, and Harris won't just be discontinuing its new Trusted Enterprise Cloud services, but will also be selling off the new data center, and expects to do so at a loss.
"Customers, both government and commercial, currently have a preference for on-premises versus off-premises solutions," Harris CEO William Brown said on an earnings call in January, foreshadowing the company's decision this week to stop offering its cloud services. "Customers don't place additional value on trust and are unwilling to move the most mission-critical applications to the cloud before less-sensitive applications are thoroughly tested and vetted in a cloud environment."
It's unclear whether that's entirely the case, or whether Harris simply has been unable to compete. Security continues to be the biggest concern for cloud services, according to InformationWeek's recent State of Cloud Computing Survey. Guidelines from the National Institute of Standards and Technology, which sets federal cybersecurity requirements, meanwhile, tell agencies that "available risk mitigation techniques are unlikely to ever be sufficient enough to allow high-value or highly sensitive data or mission-critical applications to be deployed to a public cloud."
However, according to a survey by McKinsey, CIOs expect to have a relatively balanced approach to their mission-critical and custom line-of-business systems over the next few years, with about a third of these systems in public clouds, a third in private clouds, and a third in traditional environments.
While Harris may be leaving the government cloud market, other companies continue to get good news or ramp up their offerings. Amazon, Microsoft, and Terremark all offer cloud services to government and operate or plan to build data centers near Washington, D.C., and Google has been steadily adding government customers as well.
As recently as November, Harris was publicly singing a different tune. At the time, Harris VP Wyatt Starnes told Network World that the company had dozens of customers, with more in the pipeline, and was planning expansion into other data centers for geographic redundancy.
When Harris released its cloud services last year, it trumpeted the many patented security features, including ongoing guarantees that customers were running only the workload they expected to be running. As Rich Plane, Harris' director of cyber integration solutions development and delivery, explained to InformationWeek last year, the company would capture a "digital fingerprint" of customer workloads and then verify that fingerprint repeatedly.
Harris' services also offered customers a "trust score" that indicated to customers just how secure their services were, and allowed customers to increase or decrease the score with additional security features depending on their security needs.
While Harris may be getting out of the cloud for now, a Harris spokesman said that in no way meant that Harris would be leaving the hosted or managed services market entirely.
Harris does about $5.9 billion worth of business annually, with most of its business going to government. The company was the 18th largest federal contractor in fiscal 2010, with $3.9 billion in federal business, according to federal contracting data.
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