Kundra's $2,000 mobile subsidy: What can it really get you?

In a casual aside at an AFCEA breakfast in late February, federal CIO Vivek Kundra mentioned the possibility of a $2,000 subsidy for federal employee mobile purchases. Is $2,000 enough? Let's look at the numbers.

 


If federal CIO Vivek Kundra gave you $2,000 to buy mobile devices that would serve you both at work and on personal time, what would you do with it? What can you buy for $2,000?

This question is not as simple as it seems, because it raises a host of other questions:  If you own your own smart phones and tablet PCs for use on the job, who controls security? how do you separate personal data and government data? How do agency’s IT departments deal with a plethora of different devices through back end servers?

Well, leave those questions for a CIO or administrator to answer (although they will in some cases add to the enterprise cost). You've got $2,000 in your hands. Let's go shopping.

(Bear in mind that even this isn't as straightforward as it sounds. Federal employees can sometimes find discounts at resellers, everybody can get discounts at some retail outlets, and prices fluctuate for devices for a host of reasons. But we'll give it a go anyway.)

Devices

A smart phone on a two-year contract from a carrier is going to cost an end-user around $200. But wait ... what if you quit or lose your job? Who owns the phone? Should you hold back some of that money to pay early termination fees (ETFs) that tend to run in the $300 to $400 range, or will your agency handle that should you no longer work there? 

Well, you could always go without a contract. That solves the termination fee problem but now your phone will cost more. Without a contract, high-end smart phones will run between $400 and $600. For instance, the Motorola Atrix 4G running Android is $500 without a contract from AT&T. You'll pay about the same for iPhone 4 with no contract.

On the tablet end of things, there are not yet a lot of choices. The new iPad s ranges from $499 for Wi-Fi only model with 16 GB of memeory to $829 for a model with 64 GB and 3G and Wi-Fi connectivity. The Motorola Xoom running Android 3.0 goes for $600 on a two-year Verizon contract and $800 without. Other tablets, such as the BlackBerry PlayBook or HP TouchPad (or the flood of coming Android tablets) have not announced pricing yet but should be in a similar range.

How about netbooks? Those little PCs that are not quite laptops and are not tablets and can access networks with Wi-Fi and cellular connections? Those tend to be relatively cheap, in the $200 to $500 range and come with data plans attached.

Data and Voice Plans

It is not enough to just buy a device and say “hey, I have it, I'm happy as a pig in mud." If you say it without a a voice plan, nobody will hear you. If you want to send it by text message or Twitter, or use the Web to find a better cliche (and surely there must be a better one,) you'll need a data plan. This is where the tricky Total Cost Of Ownership (TCO) comes into play.

Let’s say you get an iPhone or some type of Android from Verizon. You are probably going to want the unlimited data plan for $30 (which used to be somewhat of an industry standard and is not a bad deal when compared with tiered data plans). Then there are voice options. Verizon plans start at 450 minutes for $40 and go up from there – 900 minutes for $60, unlimited for $70.*

Then there are taxes and fees. You didn’t think that being a federal employee would exempt you from taxes and fees, did you? No no no. These usually come to about five dollars a month, sometimes more, sometimes less and can include things like insurance on the phone and extended warranties.

So, let’s say you get a two-year contract on a subsidized smart phone with 450 minutes and unlimited data. That comes out to around $75 a month. Over two years, that is $1,800. There are advantages to being a government employee though, as Verizon will often give you a discount between 15 and 22 percent (according to a conversation with a Verizon sales representative). So, take 15 percent off of $1,800 to give you $1,530. Add the cost of the phone and you are still coming in under Kundra’s $2,000 over a two year timeframe.

You and your co-workers might consider group rates. for instance, if a bunch of people in the agency want to use AT&T, then there would be one master account in a group and then every additional line (for 450 minutes) would be $10. You could change the person paying the greater amount on a schedule each month to even out the costs.

For tablets, it will depend on which carrier you use – AT&T or Verizon. AT&T offers data plans for tablets starting at $15 a month for 250MB of data or $25 for 2GB. The 250MB plan is not very much, more or less enough to check your email on a consistent basis. Tablets, like smart phones, do run on Wi-Fi so you can be parsimonious with your cellular data usage and be just fine. Myself, I would prefer the larger data plans and AT&T now offers a post-paid plan where you pay for the data you used the month after using it. Overages amount to $10 per extra gigabyte used.

Verizon had a tiered data plan with $20 for 1GB, $35 for 3GB, $50 for 5GB and $80 for 10GB. Verizon also charges extra to use turn tablets or smart phones into mobile hot spots to connect other devices to a network.

You could use your tablet exclusively over Wi-Fi and save yourself money, but there are circumstances where that would not be entirely feasible, such as employees doing data collection in the field or areas where Wi-Fi is spotty.

Another option outside of a tablet or a smart phone is to get a data card for your laptop. Sprint 3G/4G data cards run in the $250 range with data plans similar to smart phones, between $50 and $80 and usually include an activation fee and a contract.

Security

With a proposed subsidy like Kundra’s, mobile security almost by definition becomes decentralized and it would fall to the end-user to secure the phone in conjunction with the IT department. An agency’s IT department can only do so much when it has to consider a variety of different devices (though, that is starting to change) and Kundra’s plan would probably force a lot of agencies to completely rip out current back-end hardware and replace it with multi-functional modern infrastructure.

On a pure IT level, that is not a bad thing. On a budget level, that is near impossible. Infrastructure is expensive and the ability to support different standards makes it more expensive. I am not going to even try to quantify it because there are aspects of security and unified communications that are deeper than surface integrations (please, help me out in the comments folks) and are difficult to explain.

Consider a circumstance though where each separate mobile platform had at least one security option that an employee would be forced to purchase out of their $2,000. That would simplify it for the IT department because they would only have to figure out how to integrate one or two security systems for the five major ecosystems – Apple, Android, BlackBerry, Windows Phone 7 and Symbian (or the government could forbid Symbian … nobody would miss it).

Integrating security processes directly on the phone will cost between $50 and $200 a year depending on the security vendor. Symantec offers a small business plan around $50 while IBM or Cisco have plans in the $150 to $200 range per user license.

Applications

OK, so we have the device. It is sleek. It is shiny. It is vaguely futuristic. It is miraculously secure.

It is empty.

Smart devices are nothing without applications. All the fun and cool technology that makes these devices sexy and worth using are the apps.

This is where the personal/enterprise line gets blurry. You want Angry birds on your phone? That is not going to come out of your $2,000. You want Accela Analytics on your iPad? The app is free but the service is not.

And that is the kicker. Most enterprise specific mobile applications, of which there are not yet many, are going to be relatively cheap or free for the end user. But the services behind them will not be free, such as Accela Automation 7.0. Where does the money for the service come from, Kundra’s $2,000 gift or the agency’s IT budget?

There are a lot of questions to be answered with this proposed subsidy and a great many headaches in implementation.  Is $2,000 enough? Over a span of two years, it could be but that does not take into account infrastructure, standards, support and services which could make the TCO much higher on a per user basis, even if that money is not specifically coming out of the end user’s pocket.

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