Microsoft has eyes on ‘National Cloudʼ


The following story is from the April 24-May 7 print edition of the Budapest Business Journal. 

The Hungarian government is moving public data into a “National Cloud”, and Microsoft Hungary, already a partner with the government, is seeking to support this new project. We spoke with Tibor Loncsár (pictured), National Technology Officer at Microsoft Hungary, about what is happening.


Q: In the beginning of 2014, Microsoft Magyarország and the Hungarian Government agreed to work together on a venture to transfer all public sphere data into a cloud system by 2020. How is the project going right now?

A: We should be a little more precise, as we are talking about two separate initiatives. One is that the Hungarian Government and Microsoft made a strategic partnership agreement that takes in all areas of the ICT industry that Microsoft covers. The one is that the Hungarian Government has made a strategic decision to create a National Cloud environment – operated by the National Infocommunications Services (NISZ) – and migrate the IT infrastructure of the public sector into this cloud on the 2014-20 timeline.

The project is going as planned, the hardware foundation of the National Cloud is created. Currently the second phase is ongoing, which covers creating the sophisticated software layers that will make NISZ a proper cloud provider.

Microsoft’s role is key here, as it is the only meaningful cloud provider that has commercialized and made available all technology components (Windows Azure Pack sw suite and Cloud Platform System appliance) that Microsoft itself is using to provide its own public cloud services, Azure.


Q: What developments have there been in the last year?

A: The first instance of highly redundant and secure server environment and capacity was created and the basic server management implemented. There are also a few central applications (e.g. the one that manages the National Tobacco Shops) that already run on the National Cloud environment.


Q: As I understand it, the “government cloud” is a HUF 2.85 billion IT development program fully funded by the European Union. Why should the EU invest so much into moving public sphere data into the cloud? What’s the advantage of this?

A: First of all, let me differentiate between public cloud services and private cloud environments. Behind public cloud services there are commercial service providers (like Microsoft with its Azure cloud services) and customers are charged on a consumption bases.

The National Cloud is a private cloud environment, where the operator – NISZ in our case – is investing capital expenditure (CAPEX) to create a central infrastructure and provide services for “internal customers” – in our case the Hungarian public sector.

The CAPEX funds for creating the National Cloud came from EU money, as part of an operative program that is dedicated to modernizing and digitizing public services. The main advantages of this change come from the benefits of centralized and consolidated IT infrastructures, like improved availability, security and operational/cost effectiveness.


Q: Could you give us some insight into the project itself? What phases of this long-term project are to be completed between 2014 and 2020?

A: Besides the creation of the sophisticated software layers on top of the server infrastructure, there is currently an audit of all the applications that are “candidates” to be migrated into the National Cloud. It is planned and expected that by 2020, all these public sector applications will have been migrated. It is self-explanatory that the preferred environment for all new developments is the cloud, rather than individual organizations’ data centers.

This creates a situation where about 80% of all public sector systems will run in the National Cloud.


Q: How does a so-called “smart state” actually look and function?

A: “A “smart state” should really look/function like a proper business organization. On the high level that means that all formalized processes should be implemented into and supported by ICT solutions, whether the users are government employees or citizens, and all data that is by any means meaningful should be available in digital and analyzable formats.”


Q: How do the ordinary citizen or corporation based in Hungary benefit from the cloud project?

A: The most visible benefit for corporates and citizens will be that the cloud project facilitates the creation of proper electronic public services. These public services – whether taxation, health, registration, benefits or anything related – will be accessible by all of today’s digital channels and actual processing times are expected to drop dramatically.

Q: In 2014 Microsoft also started private testing of its Windows Azure Government Cloud, an Azure variant specifically for U.S. government customers. Will Azure be launched in the Hungarian public sphere, as well?

A: The Hungarian public sector chose to go the “private cloud way” with the National Cloud initiative. This is an alternative to a public cloud based initiative like Azure. The main driver of this choice is the utilization of EU funds on e-government developments. As these funds are CAPEX, creating a private cloud environment is more feasible in this situation than spending restricted operating expenses on consumption-based services like the public cloud.


Q: Governing institutions work with sensitive data. How can Microsoft protect data from hacking?

A: Data security, privacy and sovereignty are a key priority for Microsoft. According to the EU’s Digital Data Protection Acts’ expectations (often referred to as Article #29), at this point, only Microsoft’s cloud services have been announced as compliant with these expectations.

On the other hand, if we analyze precisely the currently common on-premise data management (in house data centers) practices and standards, data security in the public cloud is much higher.

Another aspect is that rather than protecting the IT infrastructure from fraudulent use/access, governments use more and more extensively sophisticated encryption techniques. This protects the sensitive information itself, not the “container” of the information.


Q: Invitel and Microsoft announced on February 27 that they had signed a joint partnership agreement to help Invitel develop its cloud services using the Microsoft Cloud Platform technology. Does Invitel have any role in putting the state into the cloud?

A: The partnership with Invitel is similar to what we are exploring with NISZ. Both want to become potent cloud providers (NISZ internally, for the government, and Invitel primarily for the public), and Microsoft has the technology to make it happen for them.


Q: What are your expectations of the Invitel project once it is finished?

A: Invitel will become one of the local major cloud service providers, beside the international ones like Microsoft, and offer tailor-made hosting and cloud services.

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