Are the clouds breaking up?

A new type of government cloud services, labeled "regional cloud hubs,” will significantly change the way state and local governments procure online computing services, according to a new report from IDC Government Insights.

“Best Practices: Regional Community Cloud Hubs – The New ‘Trickle Down’ Effect That's Boosting State and Local Computing,” says these regional cloud hubs, defined as one government agency (often at the state level) offering computing services to other government agencies, have proven successful in Michigan and Utah and are further examined within the report. In addition, the new research provides a framework for building similar regional cloud solutions.

As virtualized servers and efforts toward application standardization have merged many government solutions, less data center space is needed. “In fact, by the end of 2012 close to 40 percent of federal data centers will be shuttered” with many state governments following suit or combing multiple data centers into one or two large statewide operations, the report said. Remaining data centers often serve as a shared computing resource for multiple departments.

This evolution has the potential to trigger game-changing consequences, the report said, including:

• For the host facility, it can turn a government agency cost center into a revenue center. By selling cloud solutions to other government organizations, host agencies can offset their own IT costs.
• Local governments can buy cheaper cloud solutions than they might find on their own and they may be able to reduce capital expenditures and overhead costs.
• Cloud services will replace internal client/server systems as the main model for government application delivery. The race is on to build shared regional data centers and the largest portfolios of government solutions.