Extremes of outsourcing

Today’s New York Times has an amazing story of Arizon’s move toward full privatization of their prison system. It seems to me to be a risky prospect at best that is extraordinary in its scope. I find it hard to believe it will lead to cost savings. Overall it seems like a very, very tough case to make and my instincts are that it simply won’t work. It’s hard not to consider it an extreme measure in favor of the idea that the private marketplace can do better–in every single area of public interest. Period.

But it is another illustration that Washington’s lack of technology outsourcing for simple, boring data–like email–is extreme in the opposite direction, where we feel only the state can do absolutely everything and the marketplace can do nothing. Our state’s argument that we can only have state employees managing state owned machines in state built and operated data centers is, well, vintage 1990s thinking.

We need to move toward a technology strategy in Washington where we acknowledge the difference between commodity services and ‘value add’ services. Defining the difference is important and takes work. Do we want private contractors overseeing kids in foster care? No. Do we need to have state employees babysit a 20 year old mainframe computer with basic email data when the private sector excels at this particular service offering? No we don’t. There is no incremental ‘value add’ that a state employee brings to this task that is now the ultimate 21st Century commodity.

Email is, of course, a boring old commodity. It’s bits and bites of data. The private marketplace has designed financial, security and privacy models of service–in data centers throughout Eastern Washington and elsewhere– that are highly efficient and cost effective. The state is preparing to go mano-a-mano against Google, Microsoft, Amazon, Intuit and other world renowned companies in the very business that these companies compete on price and value.

I’m proud of the public sector and I believe in the dignity of public service but, wow, that’s chutzpah!

It’s more than email naturally and how we manage, operate and manipulate the state’s vast array of data is not trivial. The ‘private cloud’ is not ready for commercial deployment–but it’s close and all of the technology trends point in that direction with full force.

The state’s new $300 million data center is the very symbolic representation of our lack of serious examination of any material alternatives including outsourcing. This is the one area where it not only makes sense financially, operationally and practically but it’s ultimately inevitable. I predict that in less than five years this conversation will be considered completely irrelevant since data like email and more will be housed in the cloud in a private marketplace that is robust with price and service competition.

We are preparing to spend a minimum of $300 million to get into business against the very best companies in the world, all without even giving it a shot and submitting a request for information (RFI) to the private market to objectively determine if they could meet our needs for data privacy, security and cost. That is extreme–and foolish–by any measure.

Outsource prisons? Good luck with that Arizona.

Outsource bits and bites of commodity data stored in old, broken servers?

Yes we can.