Vendors open data centers for hire

Up and down the Dulles corridor in Northern Virginia, numerous unmarked, warehouse-type buildings are nestled among hotels, office parks and fast-food restaurants. In the past, such a sight in the Washington area would have signaled a classified government office. But today, it's just as likely to be one of the many commercially owned buildings where government networks are maintained.

Known variously as cybercenters, data centers and even Internet service centers, these facilities promise to help budget- and labor-strained agencies save money by outsourcing expensive information technology operations to third-party specialists.

Outsourcing some data processing work has been around for years, but what's different now are the wide variety of IT companies getting into the game and the range of work customers are willing to farm out.

In the last six months, PC manufacturer Micron Electronics Inc., chip-maker Intel Corp. and networking provider Qwest Communications International Inc. — to name just a few — have built large data centers.

"With the shortage of IT workers, everyone is having a hard time finding qualified people. [Data centers] allow [agencies] to concentrate on their core values, not on trying to provide computer services," said Rob Karmele, marketing director of Internet services for Intel, which is opening an Internet service center in Chantilly, Va., this month.

Basically large buildings filled with servers, networking equipment and generators, data centers offer a wide variety of outsourcing services to agencies.

With so-called first-generation hosting, also known as co-location hosting, the agency buys and maintains its own server but houses it in space leased at the data center. The data center operator provides what's needed to maintain the physical environment around the server, including the primary power supply, air conditioning, backup generators, communication lines and physical security.

"It is more economical because [agencies] don't have to worry about the facilities or the environmental services like purified water or air conditioning," said Bill Johnson, director of USDA marketing at the National Information Technology Center, a nonprofit data center run by the USDA that offers its services to other agencies (see below).

With second-generation hosting, the data center operator owns and maintains the server plus the infrastructure to connect it to the Internet or a private network. Then it will load the customer's software on this platform and maintain it. The customer pays a monthly fee for services provided, similar to a telephone bill. "We can handle everything," said Michael Sandberg, director of Qwest's Cybercenter in Sterling, Va. "We will design the architecture, manage the backup systems and do all the systems monitoring."

Another variation on the second- generation model is when the hosting company owns the software license and leases time on the application to the customer. Analysts expect this so-called application service provider model to skyrocket during the next few years.

Data centers are popping up all over the country. On March 20, Micron opened a 5,000-square-foot facility in Boise, Idaho. Qwest opened its 120,000-square-foot building in Sterling, Va., in December. And Intel's 73,000-square-foot center in Chantilly, Va., joins the company's other facility already running in Santa Clara, Calif. Intel plans to have at least 10 centers online by the end of the year, at a cost of more than $1 billion.

"Everyone must have a significant presence on the Internet if they want to succeed," said Intel's Karmele.

Qwest's Sandberg agreed. "It is the Web hosting that is attracting government agencies," he said. "About 20 percent of our space is leased to the government."


USDA competes with private data centers

Chances are that if you contract with a third-party data center, it's going to be one that is owned and operated by a private company. Not always though.

For more than 30 years, the USDA has run a data center in Kansas City, Mo., that offers its services to other agencies. The USDA's National Information Technology Center (NITC) currently supports more than 30 agencies and 70,000 end users in nearly every county in the nation.

In 1997, the USDA was awarded a $150 million contract by the Federal Aviation Administration for data services. The USDA provides operational support around the clock.

NITC competes with commercial vendors for clients, so it has to stay on top of the latest technology and services. "You can no longer say the government can't do it as well as private industry," said Bill Johnson, director of USDA marketing at NITC. "Commercial competition has been for the best because we have had to focus our business on customer service and meeting our customers' needs."

NITC supports more than 525 commercial off-the-shelf products and manages more than 10.7 terabytes of disk storage. In addition to its three IBM Corp. mainframes, NITC has a client/server environment that supports Unix systems from Hewlett-Packard Co., IBM and Sun Micro-systems Inc.

NITC's services include storage management, database administration, Web hosting, dataset backups and disaster recovery. Testing, systems integration, technical documentation and technical support also are available.

"We have been very successful," Johnson said. "We are a fee-for-service organization, so we are not in it for a profit. We may not always have the lowest prices, but we have fun doing it."

More information on NITC is available at

— Natasha Haubold


  • IT Modernization
    shutterstock image By enzozo; photo ID: 319763930

    OMB provides key guidance for TMF proposals amid surge in submissions

    Deputy Federal CIO Maria Roat details what makes for a winning Technology Modernization Fund proposal as agencies continue to submit major IT projects for potential funding.

  • gears and money (zaozaa19/

    Worries from a Democrat about the Biden administration and federal procurement

    Steve Kelman is concerned that the push for more spending with small disadvantaged businesses will detract from the goal of getting the best deal for agencies and taxpayers.

Stay Connected