Industry official: more contractors will absorb online privacy expenses

Cost of data breaches could spur government vendors to incorporate more security features into services.

As the Web evolves, bottom-line profits will drive federal vendors to build so-called trusted services, or applications that allow government customers and citizens to protect personal information while conducting their daily business online, a Booz Allen Hamilton executive said at a government Web conference on Thursday.

"As we look at where things are going in Web 2.0 -- follow the money," said Lloyd Howell, a senior vice president at consulting firm Booz Allen Hamilton, who compared the financial savings of outsourcing services to the Internet -- frequently dubbed the "cloud" -- with the cost of potential privacy violations. "As more and more users go to the cloud and more and more applications move to the cloud, the risk to organizations increases," Howell said. "Every day we seem to hear about another data breach. If, however, trust can be built into each service, the risk can be reduced."

Howell addressed senior government decision-makers, corporate officials and nonprofit leaders at the Gov 2.0 Summit in Washington hosted by O'Reilly Media and TechWeb. Nextgov was a media sponsor.

The key to trusted networks is so-called openID, or a login method that allows registered users to sign in to multiple secured sites across the Internet under one password and username, he said. Corporate giants including Yahoo!, PayPal, Google, Equifax, AOL and VeriSign will soon participate in pilot programs at several federal agencies to test the technology, the OpenID Foundation announced on Wednesday. The foundation is an international nonprofit organization that promotes OpenID technologies.

Currently, low-cost advances in technology are enticing government vendors to specialize in providing agencies with e-commerce platforms, remote data storage and collaboration tools. At the same time, government officials are increasingly wary about the threat these Internet-based products pose to national security and privacy.

Going forward, the ability of contractors to create a trust network will present officials with the highest value and lowest cost, Howell said.

NEXT STORY Forecast: Mostly Cloudy