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EZ RE K


KLMNO ECONOMY & BUSINESS U.S. agenciesmigrating toWeb


‘CLOUD-FIRST POLICY’


GSA is first with change in e-mail program


BY MARJORIE CENSER


Capital Business Staff Writer The General Services Admin-


istration’s decision last week to move its e-mail program to a Web-based system modeled on Google’s popular Gmail program is part of a major government drive to increase federal use of cloud computing. The GSA is the first federal


agency to make the Internet switch, and its decision follows the Office of Management and Budget’s declaration last month that the government is nowoper-


ating under a “cloud-first” policy, meaning agencies must give pri- ority to Web-based applications and services. Government


information-


technology contractors, many of them based in the Washington area, have been anticipating the shift for months, trying to posi- tion themselves for future work. The Obama administration


has said that cloud computing will allowmore people to share a common infrastructure, cutting technology and support costs. But some technologists have warned thatWeb-based software may not be as secure as systems built for a dedicated purpose. And the programs often depend on stable network connections. The push for Web-based com-


puting is part of a broader gov- ernment effort to consolidate its 2,100 data centers by at least 40 percent by 2015. Lastweek, theGSAannounced its decision to adopt Google’s


e-mail system as part of its decision to award a $6.7 million, five-year task order to Unisys, a Pennsylvania-based contractor that has an extensive local pres- ence. Unisys is partnering with Google, Tempus Nova and Acu- men Solutions to deploy and manage the system. Casey Coleman, the GSA’s


chief information officer, said the urgency to shift to cloud- based e-mail was because its in-house program depended on servers that were six years old, making it hard to find replace- ment parts. “We have experienced some


situations where it has come close to an outage that we could not afford to have,” she said. Under the contract, the GSA


will migrate 17,000 e-mail ac- counts to the cloud. The new system is projected to cost about half as much as the existing one to manage, Coleman said. In addition, the new system will be


easier to upgrade. Michael Bradshaw, director of


Google Federal, said GSA users will see some similarities be- tween their federal e-mail and Google’s consumer Gmail, which should shorten the learning curve when the new software is introduced. Federal officials said they hope


that the GSA's shift will encour- age more federal organizations to embrace cloud computing for e-mail and other applications. Cloud-focused contractors, whose numbers continue to grow, are also hoping that the move results inmore business. Unisys, for instance, has had a


federal cloud strategy in place for several years, said Venkatapathi “PV” Puvvada, the company’s vice president and managing partner for civilian agencies. “This positions us for other


cloud-based opportunities,” he said.


censerm@washpost.com Remembering when the seeds of success were planted


Then came his next break. WhenOrganic Farms closed


VALUE ADDED Thomas Heath


I


ask everyValue Added subject to tellmethe key decision or “aha” moment—


big or small—that led them to business success. Grocery store entrepreneur


ScottNash has two. First came the 1989 “60


Minutes” report on Alar, raising questions about the safety of spraying the chemical on apple trees. The second involved a Post- It note on the door of a competitor. Both were instrumental in the


success ofMOM’s Organic Market, a chain of six stores in theWashington area carrying only certified organic produce, which means it was grown without chemicals, pesticides, herbicides or fertilizers. In the competitive good-for-


you grocery business,MOM’s is growing. It plans to expand to 12 stores by 2012, including locations in Timonium next spring and inMerrifield the following year. As it happens, Iamnot in


MOM’s niche. I tend to shop at the big-nameWashington area grocery stores, and I don’t look to see if the bananas, carrots or anything else I buy is organic. ButNash is doing well without


me, building a 350-employee, $50 million business around the granola crowd. “I call them the ‘lifestylers,’ ”


saidNash, 45. “They come in and shop it and they are living the lifestyle, committed to the environment and our worldview.” It’s a reliable customer base.


After two decades of fits and starts,MOM’s yields enough profit to allowNash and his family to live comfortably in a high-rentMontgomery County neighborhood. Employees do fine, ranging from $9 an hour for starters to salaries in the six- figure range for top executives. Nash is a fanatic about overhead. You won’t find his stores in leafyMcLean or Bethesda.MOM’s are generally on back streets in low-rent retail areas.No fancy lighting or feel- good wood finishes either. The parking lot in Rockville is pocket- size.


Service is funky but efficient;


coffee, cider and hot chocolate are served for free and kids get balloons.MOM’s opens up an extra register at the first sign of traffic, and everyone has their grocery bags—printed with Nash’s e-mail address—carried


BILL O'LEARY/THE WASHINGTON POST ScottNash says accountability has helped his company grow.


to the car. Customers are allowed in before and after store hours. MOM’s is competitive, too. To


keep prices below those of its rivals, the company sends spies armed with cellphones into other stores, from where they will call in prices to aMOM’s employee. If the competitor offers an item cheaper,MOM’s immediately cuts its price. Nash, who spoke by phone


from behind the locked door of his bathroom so he could get a moment of quiet away from his bustling household (he has three children), toldmehe didn’t have a plan for his career.He just fell into it, which I can relate to. “I grewup in Beltsville and


studied business at the University ofMaryland,” where his father taught personnel management, he said. “I tried to be a business major, but I didn’t have good grades.” He quit in the middle of his sophomore year in 1986 and went to work flipping omelets for a caterer at $40 a gig.He eventually spent $400 from his student loan to buy appliances and go out on his own. He could make an omelet, but


he couldn’t get enough work to keep himself busy.He abandoned eggs but stayed in food, taking a job at Organic Farms, a wholesaler that was run out of Beltsville.He learned about the organic food customer’s profile while working at the business’s retail outlet, which was open to the public on Friday and Saturday. “Back then they were the


radicals, far outside of the mainstream.Very counterculture people.Now organics is much more a part of the mainstream,” Nash said. Nash was hired away from


Organic Farms in 1987 by a customer who ran a small mail- order business that shipped produce to consumers around the country. After four months, Nash and a fellow employee left to start their own business.


They called it Organic Foods Express. Its business model was delivering organic produce to Washingtonians’ doorsteps. To find those customers,Nash and his partner drove his Chevy Malibu wagon in the middle of the night, leaving fliers throughout neighborhoods. They did okay. But they split


within months, withNash buying out his partner for $1,400: $100 for each of their 14 customers.His mother lent him her garage and $2,000 for inventory.As business picked up, he moved into a 900-square-foot warehouse in a Beltsville industrial park for $500 a month. He bought a used walk-in cooler. He had one phone line.He grossed around $100,000 in 1987 and double that in 1988. It was a living, but not a big


one. “I remember sitting onmy


bed, saying ,‘WhatamI going to do withmy life?’ ” Then came the “60Minutes”


show raising questions about the safety of Alar.WhenNational Public Radio followed up on the story, one ofNash’s customers from Vienna called in on the air and talked up the produce she bought at Organic Express. “All of a sudden,my phone


rings off the hook for three hours. I took about 500 names down in those three hours.” Nash decided the mail order


and delivery business were too limiting, so he took a gamble in 1990 to move to a 2,000-square- foot retail space in Rockville, increasing his overhead and spending his precious cash. Competition in the health-


food market was getting crowded during the 1990s. B.Gordon, the largest natural food store in the Washington-Baltimore region, and Fresh Fields both opened stores nearby. (Gordon’s closed within a couple of years.) Revenue was so poor that he


couldn’t meet his one-person payroll, instead offering his used motorcycle in lieu of a paycheck.


down in September 1990, a friend left a Post-It note on the company’s door, advising customers to visit Organic Express if they wanted the same produce. “It was cart after cart after


cart,” he said. “We got a lot of customers from that.” Nash expanded the Rockville


store, eventually moving to a roomier space and quadrupling revenue.He opened a second store in College Park in 2000, and has since opened four more, in Alexandria, Jessup, Bowie and Frederick. While he expanded the business,Nash failed to keep an eye on profits.He rolled all the revenue back into newstores and more inventory. Whenthe 2008 financial crisis


hit and banks wouldn’t return his phone calls regarding a $1.2 million loan, he faced his own crisis. “For the first time ever, we


took our eye off growth and focused on efficiencies.We looked at labor costs.We focused on profit margin.We created metrics, bought software that helped us price our products more strategically and started measuring sales per employee hour.” The company downsized its


staff by 10 percent, mostly through attrition. “We weren’t holding anyone accountable,” he said. MOM’s now has monthly


meetings in which stores sales are examined, poor-selling products are jettisoned (Suzie’s sweetened rice cakes went out; Suzie’s puffed corn cakes came in) and the names of employees who fail to punch in and out are made public. “Holding people accountable


has had a huge impact on turning this company around,” he said. Nash won’t detailMOM’s


profit, but the before-tax profits are likely in the single digits. There is virtually no debt on the company.He said same-store sales, a common industrymetric, are up a healthy 13 percent. Although he hated textbooks


atMaryland,Nash now reads self-help business books like “Good to Great” by Jim Collins and “The FiveDysfunctions of a Team” by Pat Lencioni.He throws around company growth terms like “flywheel” that he has picked up. Anything that will help him


grow his business and grow as a chief executive. “I’mlearning this as I go,” he


said.


And without a Post-It note. heatht@washpost.com


Followmeat addedvalueth on Twitter. THISWEEK, DEC. 6


Monday Jeffrey Lacker, president of


the Federal Reserve Bank of Richmond, gives his economic outlook in a speech in Charlotte. Lacker has not supported the central bank’smove to spur the economy further by buying Treasury bonds in an effort to reduce interest rates. Lacker has argued against the


criticismthat the Fed was surreptitiously trying to reduce the value of the dollar to spur exports. And, he says, the Fed has the ability to wind down its quantitative easing programs but that finding the right time to do so will be difficult.


Wednesday TheMortgage Bankers


Association plans to release its measure of applications for loans atmortgage lenders, an important indication of the demand for housing.With mortgage rates creeping back up, it’ll be interesting to see whether already sanguine demand is declining. The Senate Banking


Committee is scheduled to hold a hearing on the structure and stability of the financial markets. Scheduled to testify are Securities and Exchange Commission ChairmanMary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler.


Zachary’s Must Reads


New York magazine has a fascinating profile of Tom Barrack, a billionaire investor who has made profit rescuing celebrities from financial oblivion. And Bloomberg Businessweek writes on how failed financial schemes helped collapse Niagara Falls, N.Y.


Thursday The Bank of England is slated


to announce its interest-rate decisions. Although economists don’t expect the central bank to change interest rates, they will be watching for signs of how it might respond to Europe’s recent decision to bail out Ireland and worries about Spain’s financial troubles.


Friday The Commerce Department


reports international trade figures for October. In September, the U.S. trade gap shrank on a drop in imports and a gain in exports. The gap is expected to stay put in October. — Zachary A. Goldfarb


Find links at washingtonpost.com/ mustreads.


NEWAT THE TOP


PETERD.AQUINO PRIMUSTELECOMMUNICATIONS


Restructuring expertise opens many doors A professor I had duringmy


graduate studies invitedme to help teach international monetary economics and finance for a summer at Harvard University. Teaching there was enough forme to feel like I could do some pretty big things. After that experience, New


Jersey Bell offeredme a job and I was eventually handpicked to start the Arlington headquarters of Bell Atlantic, which is now Verizon. I worked in the federal


regulatory group and got a good understanding of rates, tariffs and dealing with the Federal Communications Commission. We were doing a lot of things


for the first time and essentially starting a company, so to speak. It’s ironic that at a telephone company someone can talk about being entrepreneurial, but we were starting our own Baby Bell. Although the telephone


businessmay sound stodgy and traditional, the stuff I got to work on was new and exciting. . . .


I wanted to start a company


that would provide voice, data and video over fiber optics. There were people who


wanted to fundme but the market was looking worse and worse so instead they askedme to help fix broken companies. I always saw it as a temporary


assignment to help themon a project here and there, but from 2000 to 2004, I ended up helping bondholders and banks restructure 12 companies. It turned out to be a really


good job. . . . One of the companies I


worked with was RCN, managing a lot of their operations through bankruptcy. Once I got themthrough bankruptcy, they hiredme as a chief executive. It was an amazing story. It


was riddled with a lot of challenges because the industry was going through a deep recession.We didn’t know if the company was going to survive. But it turned out to be a great success story.We were able to relist it on NASDAQ and sold it this year for $1.2 billion. I had been sitting on the


board of Primus and they felt my background was fitting for this new role. Primus is so impressive that I felt it was a great opportunity to get value to shareholders here, help shape up the business units and rationalize the portfolio.


— Interview with VanessaMizell COURTESY OF PRIMUS Peter D. Aquino


Position: Chairman, president and chief executive of Primus Telecommunications, a voice and data services provider based in McLean. Career highlights: Chief executive, RCN; independent telecommunications restructuring adviser, chief operating officer and adviser, Veninfotel of Venezuela. Age: 49 Education: BS, finance, Montclair State University; MS, finance, Montclair; MBA, George Washington University. Personal: Lives in Herndon with wife Michele, daughters Alyssa and Cecilia and son Gabriel.


MONDAY, DECEMBER 6, 2010


On Mondays, TheWashington Post offers Capital Business, a weekly publication covering the region’s business community. A one-year subscription costs $49 for Washington Post subscribers and $69 for Capital Business only.


Visitwashingtonpost.com/capitalbusiness for more details.


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