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United States of Cloud saves states millions of dollars

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From the Atlantic to the Pacific, state and local governments are embracing the cloud. In all, the National Association of State Chief Information Officers (NASCIO) finds that 20 percent of states are now investing heavily in cloud computing, according to their 2014 survey. And these early adopters are saving significant taxpayer dollars.

In Iowa, for instance, moving state email and calendar systems to the cloud could put the Hawkeye state on track to save $1-2 million per year. “The cloud allows us to think more systematically about risk and pilot new services for much less investment, something we could not afford to do if we had to build things out ourselves,” said Matt Behrens, Iowa’s chief technology officer.

Since moving to Google apps, Wyoming is saving nearly $2 million a year, according to Flint Waters, the state’s chief information officer, in an interview with The Gazette. Fellow Rocky Mountain state, Colorado shaved $2.4 million from its budget last year alone by migrating email and other services to the cloud. And the State of California is investing in its own private cloud to improve information flows and reduce processing time. “CalCloud” is a partnership between the California Department of Technology and IBM to offer cloud services to state and local government agencies using a subscription model based on usage.

Cost savings and greater budget flexibility are part of the attraction. Says Behrens, “With cloud, we don’t need to make new capital investments. Instead of buying a server and not knowing how many people will use it, we can scale up and down as demand dictates. That can free up huge amounts of capital.” A study of 153 federal IT executives released by MeriTalk, a public-private partnership for advancing government IT suggests cloud adoption can cut U.S. government application development costs by as much as $20.5 billion a year, or 25 percent of the Federal government’s IT budget, by speeding up software development.

But states like Massachusetts and Iowa also see potential beyond cost savings. Joint initiatives, such as the Massachusetts Open Cloud (MOC) project, hope to spur public-private sector innovation by creating a marketplace for customized infrastructure and platform services. Led by Boston University in collaboration with other area universities, including Harvard, MIT, and Northeastern, the goal is to create a shared infrastructure that will allow researchers, government agencies and industry to create cloud-based, data-driven innovations. Azer Bestavros, director of the Rafik B. Hariri Institute for Computing and Computational Science & Engineering at Boston University, says, “Just as a shopping mall provides a shared infrastructure and amenities for a variety of retailers, the MOC creates a marketplace where developers can innovate services for many different customers, from research institutions, healthcare providers, government agencies and non-profits as well as for profit organizations, and taxpayers are the beneficiary.” To date, the Commonwealth of Massachusetts has provided $3 million to fund the initiative, and matching funds from a mix of federal, industry and philanthropic sources are expected to exceed $20 million.

States like Iowa believe the cloud will allow them to shift to an IT brokerage model, where instead of delivering services directly, they can direct state providers to best-of-breed solutions.

Like Behrens, Bestavros believes we’re just at the beginning. He points to work being done between the MOC and Children’s Hospital. Clinicians there have long wanted the ability to conduct fetal MRI, something that until the advent of open cloud super-computing resources, was prohibitively complicated and expensive. That project is now in development.

The cloud also increasingly allows states to share best practices and services. Says Behrens, “In 2012, Iowa and Michigan were the first in the nation to partner on cloud-sharing initiatives. I see cross-jurisdictional sharing agreements becoming an increasingly popular way for states to reduce cost and duplication and gain access to important new services.”

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