Contracting for Cloud Services on a Massive Scale

Many schools don't have the resources or the expertise to identify the right cloud provider or to negotiate an ironclad contract. For schools in the MHEC and WICHE consortia, though, all that's about to change.

• By Alicia Brazington
• 01/09/13

This is the second installment in a two-part series on how consortia are approaching cloud-based services. Part 1 examined how the Independent Colleges of Indiana selected a cloud-storage solution.

Leaders at the Midwestern Higher Education Compact (MHEC) are so confident in the benefits and cost savings of cloud-based resources that they are making it possible for more than 1,700 schools to take advantage of CampusCloud by CampusEAI Consortium. Seven hundred of these schools are part of the Western Interstate Commission for Higher Education (WICHE), which represents 15 western states.

CampusCloud is a high-performance computer cluster that can, according to the group, eliminate upfront capital expenditures, reduce utilization of technical resources, and ensure high performance, availability, stability, and security. The contract, signed in late 2012, has the potential to affect more than 8 million students--split evenly among MHEC and WICHE schools--and thousands of faculty and staff throughout both regions. Numerous local, state, and regional champions worked together to make this colossal cloud offering possible, with MHEC steering the search and negotiations.

The Making of a Contract
Founded in 1991, Minneapolis-based MHEC is one of four statutorily created interstate compacts, representing a range of public and private higher education institutions in 12 states. Its Technologies Committee is one of several subcommittees tasked with guiding MHEC's course. Loosely patterned after the 60-person commission that oversees MHEC, the Technologies Committee comprises five representatives from each of the 12 states.

"What the commission does, they decide in the subcommittees," explained CIO Grant Crawford, who stressed the limitations of what MHEC's 10-person staff can achieve on its own. "This ensures that the things MHEC does are the things people want done. It also ensures they get done."

In 2012, the Technologies Committee, under the leadership of John Dunning, CIO of Wayne State College (NE), recognized that cloud computing was going to be an issue for a number of schools: It recommended pursuing a contract with an overarching service provider. As a result, MHEC initiated an RFP for a restricted set of cloud services that would allow member schools to try out the cloud without fully committing themselves. The RFP was compelling enough not only to attract interest from cloud-services providers big and small, but also to spur a request from the State of California, which wants to model its own efforts after those of MHEC.

"We didn't want schools jumping into the cloud without knowing what they were getting into," recalled Crawford. "Of more than 1,000 campuses represented by MHEC, about two-thirds have fewer than 5,000 full-time students. Some have very small IT, legal, and purchasing departments, so they are not able to identify and negotiate with vendors as effectively as we can. Our hope is that our contract will save them from a few terrible decisions--and a few months finding and choosing the right vendor."

Finding the Right Fit
That vendor ended up being CampusEAI Consortium, which will offer MHEC and WICHE schools cloud storage, virtual machine hosting, and web hosting through its CampusCloud solution. "CampusEAI understands higher ed, it recognizes what's important to us, and it knows what we care about," enthused Crawford. "There are not a lot of one-size-fits-all solutions, but we didn't have to mess with CampusEAI's services at all. They know what they offer and they know what they're doing. MHEC and WICHE campuses should not have to negotiate any more terms and conditions to get exactly what they want."

According to Crawford, CampusEAI was appealing because it was open to input on the contract, was willing to meet individual state and campus needs, and offered FERPA-compliance--including the ability to store data within the US--which larger companies were unable to guarantee.

CampusEAI is not small either. According to Anjli Jain, its executive director, more than 1,800 higher education institutions in the US currently utilize one of CampusEAI's solutions. Its large presence in the higher ed market is due partly to CampusEAI's partnership with Jenzabar, which delegates all hosting for ERP to CampusCloud.

"I believe what impressed MHEC most is that we provided a reference sheet of 300 higher ed institutions to which we already provide mission-critical services," explained Jain. "Understanding the battles that institutions face and offering simple, low pricing--that says a lot about our business. And these are business decisions, not technology decisions. Value and business continuity are what it's all about."

In assessing the MHEC contract, Jain acknowledged that there are several challenges and opportunities associated with a project of this magnitude, as well as a range of complex needs. At least 25 CampusEAI relationship managers will look at infrastructure, capacity, planning, and support at hundreds of campuses, ranging from research colleges with little cloud experience to highly technical institutions that want do much of the work themselves. Rather than MHEC and WICHE carrying the bulk of the workload, these consultants will play a major role in showing campuses the potential of the solution, and in guiding each one toward success.

"The biggest benefits of shared services are that member organizations don't have to reinvent the wheel and they don't have to take the risk," added Jain. "They can leverage existing services--including shared services already offered by MHEC--and then piggyback on existing infrastructure without the need to build capital with their own dollars. The way CampusEAI is organized as a consortium, we can invest in the institutions, so they can invest in their people and their programs."

Outlook for Early Adopters
MHEC leaders will be watching closely to see which services member schools pick up, and what stays on the shelf. It's unlikely to be able to discern any real adoption patterns until this summer, however, when most major technology changes take place. Nevertheless, MHEC leaders are confident that they have done their due diligence. What happens now is entirely up to each school, which, many would say, is just the way it should be.