Governments can save billions on the cloud

Government IT managers are paying attention to open source and cloud computing. A new white paper by Darrell M. West, Saving Money Through Cloud Computing, estimatesthe cost savings governments can achieve on the cloud.

The U.S. federal government spends $76 billion annually on information technology.
Mr West estimates that government agencies usually save between 25 and 50 percent of the IT cost by moving to the cloud.

To be sure, researchers have disagreed on the cost saving potential of the cloud. But Mr West’s estimates are substantiated by a few case studies of the U.S. government projects. For example:

• The city of Los Angeles moved the e-mail service for its 30,000 employees from Novell’s Groupwise to Google’s cloud servers. It spent 23.6 percent less than the $22,996,242 it would have spent on GroupWise during the same period.

• The city of Miami shifted its service hosting to Microsoft Windows Azure platform and saved 75 percent in the first year between hardware, software, and staff efficiencies.

• Budget Information for the U.S. State Department’s Nonproliferation and Disarmament Fund (NDF) uses a SalesForce.com application for $1,426,691. This application costs one-fourth of the budget it would have required to build the application in-house.

Mr West is Vice President and Director of Governance Studies at the Brookings Institution. You can download the white paper at Brookings web site.