Colleges Unite to Drive Down Cost of 'Cloud Computing'

As professors' demand for Web-based services grows, institutional group buying may keep them from going rogue

Liz Condo

Meg Whitman, newly named chief of Hewlett-Packard, made a live video announcement this month that the company will join Internet2 to offer high-end computing, through the Web, to colleges.
October 16, 2011

In one of her first public appearances as chief executive of Hewlett-Packard this month, Meg Whitman beamed in by videoconference to a meeting of college technology leaders to announce the company's participation in what colleges are calling a "community cloud"—a pool of high-performance computers that researchers can tap into online, as needed, from any participating campus.

The officials who stood gazing up at Ms. Whitman, a former gubernatorial candidate in California and eBay executive, call the community cloud a new era of campus technology, and a new way to negotiate deals with tech giants like HP. The big idea: Colleges can collectively bargain with technology companies to establish more campus-friendly terms and prices than any one college could get on its own. In this case, the broker for the deal was Internet2, a nonprofit consortium with some 235 college members.

The group also announced a jointly brokered deal with a company that offers online file-storage lockers, and says it is in talks with other tech companies as well.

Group bargaining for technology has been tried before, but it has sometimes faced resistance or just fizzled out. Colleges have typically asserted that each campus is unique and can't use a boilerplate contract negotiated with other institutions. At least a few colleges reportedly feel that way about the HP deal. But now many campus IT leaders say that putting computing services online seems a natural fit for group purchasing, and that the cost savings can be substantial. These "cloud services"—accessed over the Internet from outside providers far away—don't require colleges to build expensive, customized facilities on their campuses, and they can be turned on or off at the click of a mouse.

One factor putting pressure on colleges to sign such deals is a growing trend of "rogue" technology on campuses. Professors are striking out on their own and using clouds even if campuses don't approve them The academics find free or low-cost consumer services online to support their research and teaching.

They're setting up class blogs on free platforms like WordPress, storing their research data on online file systems such as Dropbox, or forwarding their official campus e-mail to a free account from Google.

That raises legal and security issues, and makes it more difficult for a college to provide central technical support. Officials at one college described a popular free file-storage system as "like Swiss cheese as far as the number of security holes." And colleges are obligated by law to protect information about students.

But some college CIO's figure that if they can't beat these professors, they should join them.

I've seen firsthand the temptation to bring a free consumer service into the classroom (more on that in a minute), and The Chronicle hosts a blog, called ProfHacker, where professors share tips on the latest technologies to become more productive.

Now that the idea of "the cloud" has shifted from buzzword to reality, the question for campus leaders is, Who should control these online services? By banding together, colleges hope to better shape how the services influence campus life.

Few Clouds Over Campus

Compared with other industries, colleges have been slow to adopt cloud services on an institutional level, according to Kenneth C. Green, founding director of the Campus Computing Project, an annual survey of college IT directors. Only 15 percent of campuses surveyed last year said they had a strategic plan for cloud computing, and Mr. Green does not expect a sharp rise in that percentage in this year's survey, which will be released this week.

That could change, though, with Internet2's new effort to broker deals like the one with HP. The consortium says it is in discussions with several other big technology companies as well, as part of a project it is calling Internet2 Net+ Services.

Meanwhile, the College Solutions Group, a group of college technology directors, is leading closed-door talks with major tech companies, including Microsoft, to develop a jointly negotiated contract for colleges to buy cloud e-mail services for their campuses. While hundreds of colleges have signed on with either Microsoft or Google for free or low-cost e-mail for students in recent years, most have had to bargain solo, each one reinventing the wheel (and getting different deals, depending on their size and prestige).

From a technology company's point of view, colleges can be difficult customers. It's not always clear which officials on any given campus make the final decision on expensive contracts. And colleges want to be treated differently from business customers (the "My campus is unique" issue again). Yet for a company like HP, all of higher education represents a tiny portion of its overall business.

But when it comes to cloud computing, campuses have an unusual advantage over customers in other sectors: fast local networks. Internet2 has spent the past 15 years building one of the country's zippiest data networks, which makes getting to a Web-based service seamless.

Several companies answered Internet2's call to work with the consortium to sell at once to many campuses that are easy to serve.

That was the case for Box, a company that, like HP, has signed up to offer cloud services through Internet2. It provides users with online folders to store and share files, instead of e-mailing them or passing flash drives back and forth. Colleges that buy the service through Internet2 can give everyone on their campuses a file folder, which users can access with their existing college logins and passwords. The company's service is similar to Dropbox, which is popular among professors and students. But Box's leaders say their system offers more tools to extend the service institutionwide.

The virtual folders will cost small colleges (those with up to 10,000 accounts) about $27,000 per year and the largest (up to 200,000 accounts) about $350,000 per year. Officials say that represents a discount, but it also involves contract terms, tailored to colleges, that the company does not offer through its standard sales channel.

Why fork out that kind of money for something professors are finding free from consumer services?

The answer is in the fine print of the contract. Internet2 leaders say their key interest in the deal was not just the price but also the willingness of Box officials to update their service to better protect student data, as colleges are legally required to do under federal student-privacy law.

Cost is also a big factor, of course, and such bulk-negotiated deals could help reduce costs for some services that a college already offers, says Bradley C. Wheeler, chief information officer at Indiana University at Bloomington, which purchased the Box service through the Internet2-brokered contract.

"The cost footprint for operating higher education is unsustainable for this decade, period," he told me recently. "Our price points and markets are not going to sustain our cost structure as far as an industry."

As his language suggests, Mr. Wheeler is also a business professor, and he has studied cases in other industries where businesses have aggregated their buying power. He is now putting theories he has taught in the classroom into action.

The challenge for colleges, of course, is keeping up with all the new Web-based services that some professors will want to use.

Some, including Jim Groom, an instructional-technology specialist at the University of Mary Washington, have argued that free Web tools should serve as substitutes for institutionally provided tools, such as the course-management system sold by Blackboard. He even coined a term for it a few years back: "edupunk," in reference to the do-it-yourself ethos of punk rock.

I have been one of those professors who played out of bounds. I teach a journalism course at the University of Maryland at College Park as an adjunct, and I set up a class Web site using Google's free blog service, which students in the course are invited to join so they can post their multimedia assignments.

Although the university does provide a system to turn in multimedia assignments, called iTunesU, some students had found it hard to use.

But I also experienced the downside of using a free consumer service. Last semester, on the week that final projects were due, Google's blog service suffered an outage that temporarily removed some posts and prevented the addition of others. What's worse, it appeared that some assignments uploaded that week had vanished.

Frantic e-mails began pouring in from students.

After about 20 hours, Google restored the service and the posts. No real harm was done, but it amped up the stress during finals week.

Sure, a university-sanctioned service, too, could crash, but at least we could have called someone on the campus for help.

If the university had set up a deal with Box, the arrangement might have worked better as a way for students to submit assignments. But new services emerge in the consumer marketplace far faster than colleges typically negotiate deals.

Mr. Wheeler argues that group buying can help colleges move faster too. He says the deal with Box was negotiated in just 62 days.

Campus CIO's have been debating just how far they can—or should—go in collaborating on IT cloud services, via an online forum run by the education-technology group Educause, in a discussion called "our chessboard."

That exchange is scheduled to continue this week at a session at the group's annual meeting, in Philadelphia.

So stay tuned, as the strategic battle for the cloud continues.

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