Equinix and Carpathia Hosting are pushing deeper into the managed hosting market for government, health care and financial services clientele. But this wasn't an overnight decision. Both organizations accelerated their government hosting initiatives in October 2009 before pursuing a deeper partnership this year. Here's the update.

Back in 2009, Steve Smith, president and CEO of Equinix, said the company sized up the government market opportunity and decided to sharpen the company’s focus there. Carpathia, meanwhile, announced a line of managed hosting solutions for federal agencies. The move followed its September 2009 acquisition of ServerVault, a managed hosting firm that maintained a large federal business.

Closer Partners

Those paths have crossed in the form of joint customers. That cooperation solidified last month when the companies disclosed plans to jointly sell, market, and deliver services to federal agencies. The agreement also includes financial and healthcare enterprises.

Brian Winter, Carpathia’s chief marketing officer, pointed to compliance requirements as the general theme cutting through the vertical markets the companies jointly approach. In the federal sector, he noted, Carpathia contributes its background in Federal Information Security Management Act (FISMA) and Defense Information Assurance Certification and Accreditation Process (DIACAP) guidelines. Equinix offers expertise in data center services and high-performance networks, he added. Equinix operates a number of its IBX data centers in the Washington, D.C. area.

The companies plan to develop a set of go-to-market programs in the federal space.

A joint sales effort will also kick off with Carpathia providing a team of sales personnel and sales engineers. Equinix recently hired a federal sales lead, Winter said.

Greg Adgate, general manager, Global Enterprise and Federal Segments for Equinix, said Equinix looked at building out a compliance-minded federal business on its own. But the company decided the fastest way to go to market in a complicated space was via the partnering route.

Adgate said he believes the federal market as the next emerging sector in terms of opportunity size.

“We want to go after that market aggressively,” he said.

The formality of the new marketing alliance follows more ad-hoc collaboration.

Some Equinix data centers in Northern Virginia already deliver FISMA and DIACAP compliant hosting solutions. And while the federal focus is relatively recent, some joint customers go back nearly eight years.

“We currently delivery services together,” Adgate added. “What this [agreement] does is elevate the joint go-to-market and joint investment in programs.”

Division of Labor

Carpathia’s compliance experience fills a gap in Equinix’s data center services. In the initial part of a customer engagement, Carpathia conducts a compliance audit to  determine the controls organizations should have in place. The company also provides recurring checkups to make sure customers remain compliant with the applicable standards. In government, that means FISMA and DIACAP. The Health Insurance Portability and Accountability Act (HIPAA) applies in healthcare, while the Payment Card Industry (PCI) standard focuses on industries involved in handing credit card data.

Jon Greaves, Carpathia’s chief technology officer, said both government and commercial customers are moving toward a continuous compliance posture, as opposed to occasional checks. Carpathia offers a compliance scanning service, which sweeps a customer’s infrastructure on a daily basis.

“We see a lot of demand for a continuous compliance solution,” Greaves said.

Equinix’s data center infrastructure is sandwiched between Carpathia’s front-end professional services and back-end, recurring compliance checks. Carpathia offers compliant managed hosting and private cloud solutions, tapping Equinix resources. Equinix, meanwhile, takes the lead with compliant colocation services, leveraging Carpathia’s capabilities.

Adgate emphasized that the joint marketing arrangement lets Equinix focus on colo, deferring anything that moves up the stack to Carpathia.

“We are not moving into the managed services business,” he said.

Federal Focus

The alliance has implications for government contracts such as the General Services Administration’s Infrastructure as a Service (IAAS) program, which was awarded to multiple contractors last year. Carpathia is on two of the IAAS contractor teams. The company’s initial deployment under IAAS involves ServerVault facilities, since the Equinix wasn’t solidified at the time of award. Carpathia, however, intends to explore additional IAAS opportunities with Equinix, Winter added.

And additional federal cloud procurements are soon to get underway. Greaves noted that the GSA is close to releasing the request for proposals for an e-mail-as-a-service blanket purchase agreement. The contract would be open to all government agencies. GSA moved its own e-mail into the cloud last year, awarding a $6.7 million task order contract to Unisys and partner Google.

Winter also sees an opportunity among federal agencies looking for a dedicated private cloud solution. He said such solutions can be deployed in an IBX facility.

The partners’ upbeat tone may seem out of place during a time of federal budget cutting. But initiative with links to cost savings -- data center consolidation and cloud computing -- may yet soldier on. Market research INPUT reported this week that the budget debate has compelled the White House’s Office of Management and Budget to reprioritize IT spending. OMB’s budget plan shifts dollars from “underperforming agencies into ones that more strongly align with national priorities,” the company stated.

Among those priorities, according to INPUT, are education, research and development, and cloud computing.

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