While Software-as-a-Service (SaaS) has emerged as a highly compelling application delivery model for Public sector organizations, it has also presented government decision makers with a heady challenge. Federal agencies striving for security and compliance assurance are still struggling to leverage SaaS while maintaining the required security, policies, visibility and accountability. It was in the context of this challenge that ServerVault, the Dulles, Va.-based managed services provider of secure, compliant hosting, eyed a market need – and opportunity – to deliver a fully-compliant platform for Federal applications and systems.
Branded FCAP (Federally-Compliant Application Platform), the operating platform is comprised of business, technology, process/procedure and security elements designed to satisfy a set of delivery characteristics required of and mandated by U.S. Federal Government Agencies. The response – from both the public sector and software/SaaS providers selling into the Government – for FCAP since it rolled out roughly one year ago has been highly positive. ServerVault President and CEO John Kraft recently connected with us on the market need FCAP is filling, trends at play in secure, managed hosting, and the firm’s growth plans in the coming months.
ExecutiveBiz: 2009 is half in the books. How has the year treated ServerVault so far?
John Kraft: We’ve enjoyed a great first 5 1/2 months as it is really the best position we’ve ever been in as a company. We feel that we’ve executed as true leaders in the area of providing managed hosting, with an expertise in cyber security.
ExecutiveBiz: Talk about cyber security. How are trends in this area impacting business?
John Kraft: As someone once told me, running a successful business is like being a surfer: You’ve got to be in position to catch a wave sometimes, and we believe we are positioned at ServerVault to catch that wave when it comes to cyber security. Certainly for some early adopters in government and enterprise with experience in their information being compromised it connected right away what we do. Others hesitated until they actually had a problem. Now cyber security is broadly enough recognized, in part because the President’s cyber security concerns and the efforts of Melissa Hathaway [Obama administration’s acting director of cyber security] have raised sensitivity to the subject.
ExecutiveBiz: What is FCAP? Why did ServerVault launch it?
John Kraft: ServerVault’s FCAP (The Federally Compliant Application Platform) debuted about a year ago and it was less something we came up with in creativity sessions and more something customers were telling us they appreciated about us as far as what we could deliver. FCAP came out of conversations with organizations on how to take advantage of SaaS, but also the fact that FISMA required that SaaS be Federally-compliant. During one of these conversations a customer basically said what you’ve developed is a Federally Compliant Application Platform. The response to the platform has been great; it has been the most popularly downloaded white paper on our Web site.
ExecutiveBiz: Last Summer ServerVault and Apptis partnered to offer a trusted cloud computing environment to federal agencies to “…provide federal agencies a cloud computing platform that boosts the efficiency and productivity of their IT systems by delivering a flexible, highly secure, fully-managed and federally compliant computing infrastructure, as well as application support services.” Why was a trusted cloud needed in the public sector?
John Kraft: We did announce that partnership with Apptis, and there is definitely more to come. Most cloud computing discussions right now have been how to help Agencies take advantage of opportunities in the Cloud yet remain secure and compliant. For example, Amazon EC2 is a great service but you never know exactly where that information is residing and Federal Agencies must know this information so they have the ability to take info out of that cloud if necessary. That is typical of many of the leading cloud environments.
ExecutiveBiz: What are some other trends you are observing the public sector that you believe create opportunities for ServerVault?
John Kraft: We are seeing Federal Agencies continue to get more comfortable with the whole outsourcing concept. Some were reticent to go there in the past because they don’t like to give up control of servers and IT assets. More widespread adoption [of secured managed services] can be traced to a few key drivers like power (most federal data centers built in 1980s/1990s were not built with power requirements needed today to drive blade servers) and cooling. Many older data centers are outmoded, and public sector organizations don’t have the capabilities to upgrade them to be competitive and cost efficient. Finally, Agencies continue to have issues with the graying of workforce and the loss of key people that have been in key jobs.
ExecutiveBiz: We’ve spoken a lot about the public sector. What is happening on the commercial side of the business?
John Kraft: Great question. Because we don’t have a large national sales force we must focus efforts where we get the biggest ROI. Right now we are focused on the Federal market but not all of that focus is on Federal agencies. What I mean by that is there are many enterprises looking to increase the volume of business they are doing with Federal Agencies. The Federal government is the largest procurer of IT services in the World so in this environment that is attractive relative to traditional large enterprise buyers. Companies that want to sell into government need to do it in way that is compliant with FISMA and other NIST-driven standards, so we have found a market far more attractive than it was in the past.
Bottom line: our enterprise market is a federally-related enterprise market rich with opportunity and driven by the same factors driving our Federal side business. We also continue to do a lot of business with systems integrators, because they don’t all have focus on the compliance side.
ExecutiveBiz: What are your growth plans going forward?
John Kraft: In December we brought property next door to our primary Data Center in Dulles that gives us the capability to build a 3 acre campus which we are in the process of getting going. Our plans are to build a campus of highly secure hosting facilities that will allow us to have the capacity to respond to building demand. We’ve also expanded our employee count by almost 15% since December, and we are seeing similar growth looking forward.