U.S. Governments Cloud Computing Winners and Losers

As part of President Obama's drive to save federal government budget money, the U.S. has launched Apps.gov, hoping to encourage federal agencies to utilize cloud computing services for new and existing IT initiatives. The benefits of cloud computing, which takes software off the users workstation or local server and moves it to a hosted service delivered over the Internet, are still unclear.

"Like a utility such as electricity or water, cloud computing allows users to consume only what they need, to grow or shrink their use as their needs change, and to pay only for what they actually use," said US chief information officer Vivek Kundra, making the announcement.

Also unclear is how far the U.S. government will ultimately go with the cloud computing model. With an annual budget of $75 billion at stake, one thing is certain; there will be winners and losers. Those who stand to gain in this shift include leading cloud computing developers such as Salesforce.com and Google, but smaller start-up developers would also get a welcome boost. In fact, start-ups stand to gain the most, arguably, owing to the scalable nature of cloud computing. Makers of servers such as IMB and Dell, and hosting providers such as Amazon, with its EC2, Joyent, and Layered Technologies will benefit.

Consultants specializing in migrating systems to cloud computing will obviously do well, too. Lastly, security experts will have their hands full fending off unwanted remote accessing of sensitive data such as criminal records, financial and defense related information.

Losers? Distributed software makers such as Microsoft and IBM will have to be quick to adapt, but will most likely see loss of government revenue if mainstream office applications shift to the cloud. Network administrators and help desk personnel could be at risk for downsizing or outsourcing.

Government jobs will disappear, but be somewhat offset by jobs at cloud computing providers. Whether they will stay in the U.S. or not remains to be seen- the Cloud has no borders.