The Spreading Cloud

With governments facing fiscal pressures, IT services and applications delivered through computer servers may save on costs.
by | March 2011

Smartphones. Tablet computers. Mobile apps. These are the technological buzzwords most of us hear about today. They are trendy and decidedly consumer-oriented.

In the business world, however, the most important tech buzzword today is “cloud computing,” which, according to Darrell West, refers to IT services, software applications and data storage that can be delivered online through computer servers. West, who is director of the Center for Technology Innovation at the Brookings Institution, says today’s fiscal pressures on government will drive innovation, such as cloud computing. “Right now, cloud computing is a relatively small part of the public sector,” he says. “But that’s going to change rapidly over the next couple of years.”

In a report released last year, West found that a large percentage of public-sector IT costs gets sunk into hardware, software and storage. For example, the federal government spends nearly $76 billion annually on IT, with $20 billion devoted to computers and applications. Government agencies can save between 25 and 50 percent of these sorts of costs by moving to the cloud, according to West.

Los Angeles saved 24 percent when it moved from a proprietary e-mail system to one that resides on Google’s cloud service. Carlsbad, Calif., saved 40 percent and Miami saved 75 percent when both jurisdictions moved important operational applications to a third-party cloud service. The savings come from reductions in hardware purchases, lower software costs, use of fewer IT specialists and improved efficiency of data storage.

As with any new technological trend, government tends to be cautious when it comes to adoption. “A lot of people don’t understand cloud computing,” explains West. “They worry how the migration [to the cloud] will play out, and whether there will be the cost savings that are advertised.”

With a few more significant examples, however, the tide could certainly change.


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