Report: Governments Can Save Money in the Cloud

Report: Governments Can Save Money in the Cloud

A research paper form the Brookings Institution, a public policy think tank in Washington, D.C., examines that notion and finds the potential for cost savings. The report, “Saving Money Through Cloud Computing” was released April 7 (2010) at a cloud policy forum. Author Darrell West, vice president and director, Governance Studies, at Brookings, took a look at several government cloud adoption case studies.

The key takeaway?

"The most interesting thing was cost savings in government agencies that move to the cloud,” West explained. “We found savings [between] 25 and 50 percent, depending on the scope of the migration. Given the huge amount of money the federal government is spending on IT, there is significant potential cost saving in moving to the cloud.”

The Brookings report, citing a Federal Communications Commission study, points out that the number of federal data centers has grown from 493 to 1,200 over the past ten years. Could the cloud help agencies curb that expansion and save money in the process? Brookings found that cloud customers avoided hardware and storage procurement costs and associated cooling expenses. Software proved  another source of savings. In an e-mail migration from Novell’s GroupWise to Google cloud file servers, the city of Los Angeles was able to sidestep the cost of GroupWise and Microsoft Office licenses.

The Brookings paper provides an inkling of what agencies can expect in the cloud. However, West said agencies considering a cloud migration “need better data on cloud performance and cloud savings.”

In that regard, West suggested that the General Services Administration compile data on cloud applications, storage, and cost savings to determine possible economies of scale.

More detailed data will help government IT managers build a business case for the cloud -- which will, presumably, open more opportunities for cloud vendors.

The development of standards could also help propel the market. The National Institute of Standards and Technology will hold a Cloud Summit next month. West said that meeting will start the process of developing federal standards on security and data portability.

Thus far, a relatively small portion of the government’s IT outlay is in the cloud. Clearer answers on the cloud’s financial impact and underlying standards could help determine the extent to which agencies migrate cloudward.

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TAGS: Financing
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