Future of Cloud Computing – CSC Story.

When it comes to business process and IT infrastructure outsourcing solutions and consulting, there is no bigger name than Computer Sciences Corporation (CSC) (NYSE: CSC).

CSC Background

With 53 years of history and 97,000 professionals in more than 90 countries backing up their service, CSC regularly hits annual revenues of over $15 billion. They bag huge contracts from local and federal government agencies.

When a big public company listed on the New York Stock Exchange has been performing as consistently as CSC and keeping clients happy for decades, it is assumed that they know what they are doing.

It should be no different when it comes to helping clients migrate to the cloud and start using Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). Or at least that is what CSC would have you believe. A recent Gartner report positioned CSC in the “Leaders” quadrant of providers offering public cloud IaaS.

CSC recently unveiled CSC CloudCompute for Government – an IaaS cloud computing platform designed for federal agencies. It sounds like CSC has a something good, going here. Except for a few minor setbacks, which neither CSC nor Gartner is taking into account.

For starters, credit rating agencies have downgraded CSC near to junk territory because of a $1.5 billion write-down on a U.K. electronic patient-records contract that the company may lose entirely if it cannot renegotiate the contract. Analysts are now forecasting a $2.4 billion net loss for CSC for the financial year.    

Secondly, and this is more relevant – CSC got badly entangled in a huge cloud computing deal between Google and the city of Los Angeles that went sour. The CSC and Google partnership was supposed to bring 30,000 users on to Google Apps by June 2010.

However, the city backed out partially and only allowed 17,000 users to start using Google Apps for Government (GAFG). The other 13,000 are still using their old on-premise GroupWise email system from Novell. The reason given by the LA City Council is that Google was unable to meet security compliance for LAPD (police department) users.

To make a long and complicated story short, Google is taking a big hit and so is CSC, which will end up losing a quarter million from its $830,000 integration fee. More important than the money is the perception that CSC messed up a major government deal that they could have been used as a reference for their capabilities in cloud PaaS and IaaS area.

CSC Future

Let me say that 2012 may not be the best starting year for CSC, in terms of their Wall Street and Silicon Valley reputation. But I will take the long-term view and give them a little leeway, given the company’s huge footprint and 53 years of stellar customer service. CSC, I think, will bounce back from these setbacks and be a force to reckon with in cloud computing in the longer horizon.

Author: Cloud Consultant at CIONNE.com.

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