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Outsourcing helps spur data center land rush outside D.C.

By Patrick Thibodeau, Computerworld
February 12, 2008 11:06 AM ET

Computerworld - The U.S. government may be making greater use of privately owned data centers to house the nation's secrets, as well as more of the nation's business in general. Or at the very least, data center hosting firms are expecting the government to do so.

The evidence lies in the growing number of data centers being built in the Washington area by hosting vendors, along with a trend among federal agencies to increase their reliance on outsourcing providers.

Many of the new data centers being built outside of Washington's Beltway are being designed with the highest levels of security in mind, with barriers, bulletproof materials and electronic protections that are intended to make them capable of withstanding attacks by people on foot or in vehicles.

For instance, Terremark Worldwide is building a data center complex in Virginia's Culpeper County, about 60 miles from Washington, that illustrates the type of services being offered by private operators. Terremark detailed its plans to construct five 50,000-square-foot data centers at the site last June, and it expects to begin operations there by this June.

The company said in November that the IT space will be capable of processing and storing some of the federal government's biggest secrets -- data that is classified as TS/SCI, for Top Secret/Sensitive Compartmented Information. That level is considered to be more sensitive than the regular top-secret category.

Miami-based Terremark thinks it is the first data center operator to get a contract from the U.S. General Services Administration specifying that its facilities comply with the government's Sensitive Compartmented Information Facility standard. SCIF outlines stringent physical security requirements, such as the thickness of doors, the strength of concrete and the use of alarms and acoustical controls to prevent any eavesdropping within facilities, including by electronic means.

While the inclusion of Terremark on the GSA's SCIF list doesn't mean it is the only data center operator that can meet the standard, the pre-approval could potentially cut months off of the usual contracting time for government agencies, according to Jamie Dos Santos, president and CEO of the company's Terremark Federal Group unit.

Terremark's belief that it's important to be listed as SCIF-capable may be a sign that processing of high-security government data at privately operated data centers is becoming more routine. But the biggest driver of data center outsourcing by federal agencies is their need to build redundant systems in so-called safe areas, extending even outside the 50-mile nuclear blast zone as measured from downtown Washington.

John Slye, an analyst at Input, a market research firm in Reston, Va., that tracks government IT spending, predicted that the amount being spent on outsourcing of application management and services -- a category that would include data centers -- will grow at an average rate of 7% annually over the next five years. That would increase it from about $6 billion this year to $8 billion over the next five years, out of total IT spending that currently amounts to about $70 billion.

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