Cloud hubs to change government procurement of computing services

By eGov Innovation Editors | Jan 20, 2012

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In a new report, IDC Government Insights said that a new type of government cloud services, labeled "regional cloud hubs," will significantly change the way state and local governments procure online computing services.

These regional cloud hubs, defined as one government agency offering computing services to other government agencies, have proven successful in the US states of Michigan and Utah and are further examined within the report. The new research also provides a framework for building similar regional cloud solutions.

"We believe that cloud hubs will see rapid growth, since the first multiagency efforts have already shown a positive return on investment and solid service levels for cloud solutions subscribers, said Shawn McCarthy, research analyst, IDC Government Insights.

While any level of government can, in theory, offer services to any other government office, IDC Government Insights said state-level governments are particularly well suited to serve as regional hosts, offering government-to-government services to other state agencies or to local governments.

This is true because local governments are looking for trusted cloud providers and for ways to cut IT costs. Through these cooperative arrangements, the government sites are able to use  private cloud services. Being able to purchase services through high volume state contracts can give local governments a substantial pricing edge. 

"In general, the larger government operations that already manage complex IT systems will evolve as the most likely regional hosts," continued McCarthy. "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."