Governments Reap Savings with a Cloud-First Approach

Learn how the cloud is helping governments to reduce licensing fees and minimize the burden on IT staff.

The state of Texas embarked on a multipronged approach to cloud computing several years ago to reduce costs and boost efficiency and flexibility.

“We wanted to establish a safe and secure place for agencies to move forward with cloud technologies when it was advantageous to do so,” says CIO Karen Robinson. “As a result of a successful, two-year pilot program that concluded in 2013, our legislature passed a law that encourages state agencies to consider the cloud first when starting major projects. Ever since, we’ve been working diligently to make cloud contracts available so agencies can explore those opportunities more easily.”

Texas last year also licensed 110,000 Microsoft Exchange Online mailboxes. Todd Kimbriel, chief operations officer for the Texas Department of Information Resources, says the state slashed its email costs by about 65 percent by going with a Software as a Service (SaaS) delivery model. Along with reducing licensing fees, the state has minimized the IT administrative burden.

63%

The percentage of IT managers whose organization uses SaaS applications

SOURCE:“2014 Public Cloud Computing Trends” (Enterprise Strategy Group, March 2014 )

“We no longer need an IT person to manage email servers in-house,” Kimbriel says. “We’ve been able to repurpose our staff to focus on more value-added services, such as end-user facing support services.”

Kimbriel also foresees saving up to 50 percent on virtual servers and storage through Infrastructure as a Service offerings. The state recently awarded 10 cloud contracts, including IaaS, Platform as a Service, a cloud broker and third-party assessment providers. Texas was one of the first states to sign on with a cloud broker, which serves as a liaison between the state agency and the cloud provider. Kimbriel notes that brokers have a more flexible financial model, which works to the state’s advantage.

“State agencies can only pay for a service once it’s consumed, which doesn’t always fit the service provider’s model,” he says. “But a cloud broker has the ability to pay the service provider and then bill us on standard net-30 terms. The cloud brokers also generally have architects on staff who can work with the agencies to develop a blueprint for the specific service they need.”

Mark Bowker, a senior analyst for the Enterprise Strategy Group, adds that the operational efficiencies cloud services deliver can aid the bottom line. “Cost savings are important, but there’s also a lot to be said for the way the cloud lets IT departments easily provision IT services to end users,” Bowker says. “Organizations can scale services up or down as they need them, which makes them more agile.”

Savings in Palm Springs

The city of Indian Wells, Calif., in the Palm Springs area also recently began using Microsoft Office 365. IT Manager Nick Werner says the city reduced its email costs by about 20 percent per year by using Exchange Online.

“The city only has 30 employees, and I’m the entire IT department, so it’s great for me to offload the email servers and have Microsoft take care of the patches and all the maintenance,” Werner says.

Over the past few months, Indian Wells added Microsoft SharePoint SaaS, but Werner’s not looking to offload core infrastructure such as the city’s virtual servers. However, he’s looking at an IaaS service for backup and recovery and expects to send it out for a competitive bid.

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Jul 17 2014