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Summary:

IT officials in cities and towns are far cooler towards the notion of cloud computing than their peers in state and federal government, according to new IDC research. That’s surprising considering how much they could save by making the move, experts say.

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Say what? Local governments are the least enthusiastic segments of the government sector — compared to state and federal government entities — when it comes to cloud computing adoption. That was the most surprising factoid coming out of new IDC research released Monday.

That’s surprising because it is local governments — towns, cities, counties — that could save the most from moving pricey on-premises IT into a shared-resource model.

Of the 400 IT employees in state, local, and federal government surveyed,  the local folks were the “least optimistic” about cloud of all with 14.7 percent saying that cloud “wasn’t at all important” to them.  The percentage responding that way among civilian federal IT respondents was 10.4 percent; for defense department federal IT officials the number was 8 percent; and for state IT the figure was 7.1 percent.

IDC analyst Shawn McCarthy, who directed the survey, was himself a tad taken aback by the finding. “The biggest likely growth area for cloud is at the state and local level so I was surprised to see local lacking,” McCarthy said in an interview Monday.

On the other hand, it makes sense that the federal government — with its cloud-first initiative — moves faster to adopt new technology, and local interest will grow, McCarthy said.

Feds lead, locals follow

“I don’t want to call any solution ‘cookie cutter’ but most cities have similar needs and most states have similar needs — they need to issue licenses, they have HR systems for their own employees — these are common tasks and could be shared,” he said.

Given the budgetary pinch most localities find themselves in — as states and federal governments cut local aid — it’ s not surprising that they’re not cloud deployment happy. Afterall, they’ll have to spend money to save money.

Some regions — the state of New Jersey and parts of New York come to mind — are pushing to streamline municipalities to reduce overlapping or redundant taxing authorities. New Jersey, for example, is home to 566 municipalities — soon to be 565 as the township and the borough of Princeton finally agreed to merge. In theory, the ability to also converge that welter of various IT systems onto cloud infrastructure could also mean huge cost savings.

Jonathan Reichental, CIO of the city of Palo Alto, CA., said IDC’s findings echo what he hears from other municipal IT leaders.

Palo Alto is working with Junar on an open data project.

Palo Alto, being at the epicenter of Silicon Valley, is probably further along this new tech path than other municipalities — in fact the city just launched an open data project with Junar that will make public information more easily accessible.

Local IT people are often so busy just keeping things running that broader strategic planning gets short shrift, he said. “They need to have confidence that they can get the same results and have the same management capabilities in the cloud that they have now on premise,” he noted.

Consolidating workloads, communities on the cloud

In talking to localities, you also have to define your terms, Reichental said. Use of public cloud a la Amazon may be a stretch for cities and towns, but many of them have already virtualized their servers and have some private cloud implementations in place, he said. And many may already use software as a service for targeted applications.  Palo Alto, for example, uses Saleforce.com’s Chatter social networking application and Neogov for recruitment and hiring.

But Reichental said local governments are just scratching the surface of what cloud could do for them. Thinking bigger,  he could imagine huge cost savings if the 40 towns in Silicon Valley could consolidate their buying power for cloud applications — something that could happen if parochial concerns could be put aside. Admittedly, that’s a big “if.”

An early test case for how efficient cloud computing could be for towns that agree to consolidate their workloads may be the UK’s Project Athena  which will run services of seven town councils on cloud infrastructure. As reported by the CloudPro site:

Under Project Athena, Lambeth, Lewisham, Barking and Dagenham, Brent, Croydon and Havering councils are moving finance, procurement, HR and payroll services to a single shared cloud-delivered platform and, if the project is a success, there could be more opportunities for other councils to share resources.

Given the ongoing financial constraints localities face in this bad economy, local IT pros will trust more of their workloads to the cloud provided they can be reassured that the resulting services will be as good of better than what they’re getting now and if doubts about security and management can be assuaged.

Feature photo courtesy of  Flickr user Editor B

  1. Are the savings really from cloud or are they more from using shared services?

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    1. both i’m sure.

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  2. I think the entire city of LA uses Google Apps as their intranet system. If Los Angeles can use the Cloud, anybody can. I don’t t see what the big issue is anymore. Security is really no longer an issue and the benefits really are abundant.

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    1. there has a been a big controversy re. LA’s use of google apps–at least in terms of the LAPD which was supposed to use it but has since declined.

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  3. I’ve worked for three governments and I’m sorry but this analysis is ridiculous. Governments look the same on top but deep down they’re completely different. We recently did a study on IT consolidation in our area and almost nothing came of it because you can’t get legislators and policy makers to agree on what’s needed. Try taking power away from any of the 40 CIOs and union labor they supervise. Good luck. There are 4 gov entities in my area and there are 4 different email retention policies based off of the same statutes. How does that happen? Plus, I think folks are starting to see austerity isn’t working in Europe so why let go of few folks for some bad press. When folks see governments laying off they run out of town thus exasperating the recession in that area. We have IT equipment that’s been running for over a decade in our facilities, not that that is a good thing, but nonetheless look at the cost savings of not replacing that equipment every 3 years like most of these ridiculous analysts suggest.

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    1. Interesting comment. You are right cloud-driven shared services are more about business, operational and cultural issues than technology. Having successfully implemented multiple cloud-based solutions for government clients you raise valid points namely -

      - Cultural issues around “turf”: For shared services to work and true savings to occur, it is essential for organizations to re-evaluate their role and be willing to transform. Unless there are powerful drivers to force change, the status quo certainly will prevail.

      - Standardization (lack thereof): Luckily the emergence of cloud environments/SAAS helps/compels organizations to start re-looking at their “specialized” requirements and figure out how they can leverage out-of-the-box (OOTB) capabilities. Typically this is easier with commodity services than more customized business services.

      - Staffing/HR: New technologies have a habit of causing change. A lot of times agencies are able to effect savings by transforming their hired/vendor/contractor workforce and re-training/re-deploying their internal staff. The idea is to try and avoid laying off staff.

      Clearly, the points you raise are true of every organization especially government agencies.

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  4. Andrew Staples Tuesday, August 7, 2012

    I’ve written quite a few case studies about government customers. Their decisions are determined by size and budget, just like the private sector.

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  5. Q3 technologies Wednesday, August 8, 2012

    The faster they realize, the better for them.

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