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Johnson Says Government, Industry are Innovation Partners

As prepared for delivery.

Remarks by
Martha Johnson
U.S. General Services Administration
TechAmerica 21st Annual Federal CIO Survey Release
Washington, DC
May 5, 2011

Thank you for that generous introduction. And thank you to TechAmerica and Phil Bond [President and CEO, TechAmerica] for hosting me today. I’m delighted to be here. I spoke to this audience last year, and it’s great to be back to share some of our work and what we see in front of us.

I bring greetings today from President Obama and my colleagues in his Administration.

I also bring you personal greetings as a businesswoman who has logged more than a few years with businesses of all sizes and from all sectors. I think of being a businesswoman as a sort of personal identity. It might not be my exact role right now but it is core to my professional identity.

And, I say that having been in a variety of businesses – architecture, diversity consulting, executive search, government strategy consulting and manufacturing. Therefore, I know about MOBIS contracts because I was a MOBIS contractor. I know about scope creep because I have been a project manager. I know about the patience and diligence it takes to do business with the government.

I also know enough to be dangerous about the IT industry and my hat is off to you for being in a sector of our economy that changes with the blink of an eye and is the darling of our growth projections. Thank you for leading that charge.

Having listed a bit of my resume, I have to say it sounds as if I couldn’t keep a job. But I am honored now to lead the U.S. General Services Administration and I intend to keep this job for another six years.

GSA’s mission is to use our expertise to provide innovative solutions for our customers in support of their missions and by so doing foster an effective, sustainable, and transparent government for the American people.

In other words, we support the Department of Veterans Affairs so that they can support our veterans. We provide infrastructure for the Department of Commerce so that they can promote American businesses abroad and support them here at home.

When I think about GSA’s business model, so to speak, I have to say that my business school strategy professors would cringe if they heard me describe it. But, it is true that GSA does everything for everyone. That’s our niche: it’s the anti-niche niche. We have the anti-strategy strategy.

And, it is truly vast. Our customers range across all branches of government: legislative, executive, judicial, state and local.

We work in design, real estate management, IT, fleet, credit cards, travel services, commodities and services, as well as disposal. Our people range from architects to auctioneers. Truly, we do everything for everyone.

But, our positioning is actually precise. GSA is the membrane between industry and government. And a membrane needs to be healthy and porous – transferring knowledge and interpreting market signals to our government customers on the one hand and transmitting their requirements to the private sector on the other.

Under ordinary circumstances, this is a big job. But these are not ordinary circumstances. Our country faces serious challenges both at home and abroad.

Our fantastic military needs support, our cherished veterans need care, all our children need good schools and our infrastructure needs more than just a facelift. Too many Americans still feel the terrible anxiety and pressure of unemployment, and we have a long way to go before our economy is fully on its feet again.

That said, we are seeing encouraging news. Two years after a harsh recession, our economy is growing, and showing real signs of strength. We’ve gained almost 2 million private sector jobs in the past 13 months, and for the fourth month in a row, the unemployment rate has dropped – most recently to 8.8 percent in March.

To continue and intensify this growth, President Obama has set an ambitious course for the government and for the nation. The way I hear it, he is not talking about returning to just OK. His message is about out-innovating, out-educating, and out-building the rest of the world.

We have done it before. We’ve mapped the human genetic code and peered into the far reaches of the sky, brought the internet to millions, lifted untold numbers out of poverty, stamped out diseases and built the finest schools, community colleges, and universities in the world.

But, no one did this in a vacuum or as a one-man-band. This is not a solo story or a loner adventure. We did it in partnership. Government and industry. Arm in arm. Hand in hand. Together.

Together, we tackled research, discovery, entrepreneurship, financing, skill-building, incentives, markets, and taking to scale. We learned together. We shared risk while seeking to avoid the reckless. And our nation grew and prospered.

But the government-industry partnership cannot stand pat. It needs continuous tending and nurturing. So let me tease out what the handshakes in this partnership look like to me at this time.

Right now, the government needs your “innovation muscle.” We all know that the IT industry requires innovation to stay in its game. You know firsthand the challenges faced by an ever-shifting business environment. For example, every 5 years there is a tenfold increase in the volume of digital information. You are facing that down. For example, Cisco estimates that over one TRILLION devices will be connected to the Internet by 2013, and according to Forrester Research 25% of personal computing devices sold will be tablets by 2015. You are facing that down. For example, communications and social media have set off tectonic shifts in our society. Ten years ago we had no idea what a “tablet” or a “twitter feed” was. You are facing that down…. Or perhaps I should say “facebooking” that down. So that’s the important role you play.

On the other side of the equation, the federal government is the single largest purchaser of IT goods and services in the world – over $80 billion annually.

At GSA, we’re working hard to link these two pieces (remember what I said about being a membrane): you – the IT professionals and innovation engine – to our customer agencies so they can find the right solutions. And, agencies’ challenges are significant.

Federal agencies face budgets that are uncertain yet certainly diminished. They need to provide top-quality services to the public while navigating increasingly complex IT requirements for cybersecurity, data center consolidation, sustainability, and cloud computing.

To help them, GSA is rolling out a full spectrum of end-to-end, strategic IT solutions and complete life cycle acquisition support. We develop agency requirements, create the right acquisition vehicles, and built IT procurement packages that are easier, faster, greener, more secure, and – importantly – more EFFICIENT.

Let me tell you a couple stories. First, about the government and data centers and cloud computing. Over the past decade, the private sector has reduced their reliance on home-owned data fields. IBM, for example, went from 235 data centers in 1997 to 12 data centers in 2009. But the reverse has been true of government.

In 1998 the government had 432 data centers. Ten years later, we had nearly 2,100. In square footage terms, that equals about 5 and a half football fields worth of server space. But, unlike most football fields, many of these servers data racks were only used intermittently and at peak times; the rest of the year they were idle but still energy drains.

We estimate that utility costs per square foot for data centers are easily 80-100 times as much as standard commercial real estate. In 2006, Federal servers and data center used more than 6 billion kilowatt hours of electricity. That utilization rate put the government on target to exceed 12 billion kilowatt hours by this year – enough to power nearly 1 million homes for a full year.

That kind of energy usage -- and the resources required to maintain it -- is neither practical nor strategic. Indeed, this growth is costly, inefficient, redundant, and unsustainable. It’s clear that data center consolidation is the right move and the prudent decision for agencies. But what do we do with the data from the centers? Where does it go, and how can we be sure that agencies are keeping their information secure and getting the best value?

The answer is the cloud, and GSA is poised to lead agencies there. The Federal CIO, Vivek Kundra, estimates that over $20 billion dollars in federal IT resources are cloud-compatible, and agencies are moving in this direction. At one relatively small data center not far from here in Rockville, Maryland, the Department of Health and Human Services was spending $1.2 million each year on electricity.

That center, along with dozens of others, has now been shuttered, saving the agencies money and allowing them to focus their resources on their vital missions. To help agencies consolidate, GSA is shifting our own operations and building contract offerings for customers. Our goal is to make it easy for agencies to adopt cloud services.

We already have an impressive suite of options including our Alliant and Alliant Small Business contracts that are flexible, workable, and perfect for agencies with complex requirements and special needs. But – seeing the clear need for trusted cloud services – GSA is awarding two blanket purchase agreements for cloud offerings that will be easy to use and offer firm, fixed prices negotiated to leverage the buying power of the federal government.

One of these agreements is for Infrastructure-as-a-Service. It was awarded last October, and it includes cloud storage, virtual machines, and web hosting as the offerings on tap to agency customers.

The other, Email-as-a-Service, is really about amplifying the collaborative capacities of the cloud, and it has a cast-iron value business case to support it. Participating agencies are billed for the service based on the number of mailboxes used. The cloud provider supplies and maintains the infrastructure. And the anticipated return on investment in converting is less than 2 years.

Indeed, the average cost per mailbox on a cloud platform is a little over $14 per box per month. That’s a full 44% cheaper than on-premise email systems, and it nets out to annual savings of over $1 million per 7,500 users. Perhaps best of all, the acquisition of cloud solutions can be done easier, better, and faster; think minutes, not months.

Already, 15 agencies have identified 950,000 e-mail boxes across 100 email systems that are going to move to the cloud. With GSA’s contracting knowledge and customer-focused expertise, we will move the needle even further and faster.

And, now let me tell a second story. This is about the government workplace of the future. And, we use a peculiarly government word for this: Telework. There is a bill that has been signed into law about Teleworking. There are budget pressures that are going to lead agencies to seek rent reductions from space reductions that are going to encourage Teleworking policies. But, mostly, Telework is in our future because you in the private sector have set the pace. You’ve created the devices, understand the IT backbone, familiarized us with chat functions, and demonstrated the culture change required. The government needs to make this change as well.

I’m a bit of a zealot for this because I learned how sensible this was when I was in the private sector.
When I worked at CSC, it didn’t make sense for me to wake up at 2 AM in Annapolis, drive and hour to Fairfax, and get on a conference call to India. Why not just make the call from my kitchen? My kitchen began to figure rather largely in my work life. Then I moved into government, joined the Obama Administration, and because of the snow—a-palooza last year – I was sworn into office virtually – over the phone – from my kitchen.

So, government is on to this. We can see the efficiencies and the sensibility of having this capability. But we have a significant journey in front of us. At GSA we are doing everything short of somersaults to Telework ourselves, practice ourselves, show the efficiencies, argue the sustainability benefits, and explain the security advantages. We believe deeply that work is what you do – not where you are. Help us with this. Your partnership, modeling, and best practices will boost us along.

A third story: Again about the workplace of the future. Our historic headquarters building in DC is currently under renovation – it was one of the only federal buildings left in the city that still had air-conditioner units hanging out of all the windows. We were blessed to receive ARRA funding that is allowing us to do this much needed work. When we moved out in December, it was home to some 2,000 employees, but when its construction is complete we’re aim to collapse all of the Washington area GSA into that one building. That will amount to putting 6,000 employees back into it. We’re going to triple the building’s capacity.

We call it our “extreme challenge.” This will only be possible because we will be using collaborative technologies, space scheduling software, mobile and virtual work tools, secure yet easily accessible information, good video conferencing and telepresence, and more.

Again, we will be relying on your innovation, serving ourselves up as the champions and the models of how to use new technologies, and together we can influence and change all of government into more progressive, virtual, and collaborative work environments

And there are many more stories: stories of using innovative technologies to close gaps between the government and citizens by solving problems in on-line challenges, innovating with new smart building systems to run our buildings more efficiently, and sensing and collecting data on our fleet vehicles to understand and improve maintenance and performance.

Your innovation plus our proving ground posture and membrane positioning can help move government to higher levels of performance. We will all enjoy a government for this great nation that works – and works ever better. To achieve this, we need a business sector and a tech community that are competitive and vibrant.

The economy of the future will succeed because of your innovation, your invention -- and your re-invention. At GSA, we are absolutely firm in our resolve to work with you, to hear you, to share ideas, to collect wisdom, to shed lessons, and to collaborate with you. It’s through partnerships with the IT community that we’ll be able to succeed for our citizens, for our country, for our economy, and for our future.

I’m confident that together, arm-in-arm, hand-in-hand, we can help build a government that works ever better and ever harder for the American people, and together we can build a bridge to a better, more efficient, and more sustainable tomorrow.

Thank you.

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