Federal, state, local governments implementing "regional cloud hubs"

January 20, 2012

Government cloud computing adoption has increased recently, as U.S. federal, state and local agencies continue to combat tight IT budgets with the cloud's cost-cutting and efficiency-boosting benefits.

According to IDC Government Insights, the rise of cloud usage among government organizations has fueled the creation of "regional cloud hubs," a service model where one agency provides computing services to another. The most common IT alliance is between state and local governments, as the strategy has already been successful in Michigan and Utah, the source said.

"We believe that cloud hubs will see rapid growth, since the first multi-agency efforts have already shown a positive return on investment and solid service levels for cloud solutions subscribers," said Shawn McCarthy, research analyst at IDC. "Smaller government agencies may choose to get out of most IT hosting and management operations, as long as they can find reliable, affordable and privately hosted solutions through the cloud."

These smaller organizations, such as local agencies, will partner larger state and federal governments to receive cloud technology like Infrastructure-as-a-Service, Software-as-a-Service and data storage, among others. The report explained several advantages of regional cloud hubs, including the ability for local agencies to purchase low-cost solutions from a reliable source. Meanwhile, state governments will benefit from hosting other organizations' data and services, as selling solutions to other agencies will negate some of their own IT costs.

IDC said most regional cloud hubs will be developed by in-house IT departments or third-party cloud providers.

Cloud adoption is a significant goal of the Obama Administration and Congress, as both have expressed desire to reduce agency IT budgets while improving security. In a recent blog post, federal CIO Steven VanRoekel said government organizations have already identified 79 services to transition to a cloud environment, which he believes will decrease both short-term and future IT costs. The U.S. government has taken extensive measures to ensure security in the cloud, including the recent launch of the Federal Risk and Authorization Management Program.

-McAfee Cloud Security