Microsoft’s Stuart McKee — a member of San Diego County’s Innovation Council — said that from Microsoft’s perspective, software licensing is a “very small portion of the overall costs,” compared to the infrastructure portion of providing a shared service. “If one entity has a piece of software and they spin up a cloud-enabled service, and the other entity is using it, I don’t think it necessarily requires the other entity to pay for it twice.” McKee said that if subscribers are using client software to access the application, there could be licensing costs.

McKee said that when he was CIO of Washington state many years ago, he did compete with the private sector in some respects, and confusion may come from government’s practice of budgeting for capital systems.

“Historically, with a Microsoft purchase, you buy bits and binaries and you got CDs and licenses and installed them on servers, and you used a capital budget to do that. In the cloud, you are buying a subscription. I’ve been in a lot of conversations where there’s a bunch of enthusiasm and ‘we’re going to the cloud, and this is exciting’ and then they get down to ‘how do we buy this?’  They’ve never bought subscriptions before and so how do you categorize that? How do you deal with that; what are the terms and conditions?

“We’ve done a lot of stuff around things like license mobility,” McKee said. “Customers that currently have agreements with us … it allows them license mobility. They’ll take their licenses from on-premises into the cloud and back. We don’t believe it’s all or nothing.”

Former Montgomery County, Md., CIO Steve Emanuel — now CIO of New Jersey — said the computing paradigm has changed in the past three years from per seat, server or CPU to software as a service or infrastructure as a service, and those models move away from physical boundaries. He likens the state providing services to a county or city in the same way that he’d offer vacant office space with some fees for heat and light. “We have to figure out how we can demonstrate that they don’t need to build the same house or the same building right next to us when they’ve got space in ours. It’s that whole sharing concept.”

Neither Bertolini nor Emanuel said they have a solution to licensing, just that they need to partner with vendors so they can hash out the issue.

But there are signs of positive change. Las Vegas’ Marcella said the city uses Chameleon software for the animal shelter system, which it hosts for other jurisdictions. “Chameleon allows for either a government-hosted site, or they will host the application, so they are used to having multiple jurisdictions and having their system being able to partition and manage it.” In addition, he said, the city has a memorandum of understanding for its Esri GIS with multiple layers managed by numerous jurisdictions, which is a vendor-recommended model.

Emanuel said the shared environment took some vendors by surprise. “We’ve seen it with Oracle. We definitely saw it with Microsoft, because Microsoft’s license mobility is a response to that.” And the changes go beyond just premises and cloud. “It could be someone else’s premises, and it could be multiple clouds. If we’re going to build in total flexibility as the Internet and the cloud are supposed to provide, who cares where they get their service and data as long as it’s the current data and good service?” He said vendors must deal with not only open source software but also with cloud email providers. Emanuel added that it’s refreshing to see Microsoft’s licensing mobility option.

“We’ve been doing network-enabled services for quite a long time,” McKee said. “And that’s all the cloud is — it is just our ability to connect. But the difference with some of these cloud offerings is that we’re moving from products to services.” McKee said cloud is being promoted as a commodity or utility by vendors and experts. “But you’re not just buying software, you’re buying a service. So the quality of the service is what matters.”

McKee said the bigger question, which he doesn’t have any answer for, is about projects on a national scale. “Generally speaking, within a state, there’s a lot of jurisdictional law in place that addresses that.” One successful national example, he said, is the Washington State Digital Archives, which for years has provided infrastructure to other governments around the country.

“Sharing services is not just about technology — it’s sharing a police force, library systems, networks,” Emanuel said. “That’s the only way government can make some significant reductions in infrastructure without cutting services. And they’re looking to technology to do that. The licensing model is just one small piece of it.”

Doll said he encountered licensing issues with virtualization. “We share resources with Unisys. Our storage is not on dedicated boxes, our data can be right next to some other client’s data, so when you share the processors, you will run into the same challenge as when you went to the virtualized arena.”

Due to the pricing structure, Doll said Minneapolis had to cut back on virtualization because it led to an increase in licensing. However, he added that licensing isn’t the only challenge — security, availability and accessibility to information, as well as having the facilities to handle required audits are all concerns.

 But the news isn’t all bad. Local governments are stepping up to the plate and handling the tough economic times as best as they can.

“I think we in government are hitting it out of the ballpark, with the innovative thinking about how we deliver services, and really putting us ahead of the private-sector organizations that don’t yet have to think this way,” Emanuel said.

This story could be one of IT organizations hammered into defeat by relentless budget cuts and insurmountable obstacles, but it’s not. At a time when cities have actually gone bankrupt, and federal, state and local governments have suffered cut after cut to keep afloat in a sea of deep red ink, we found few pleased about the situation, but none defeated.

Local government CIOs and IT staff have — in spite of all opportunity to do otherwise — managed to keep the lights on and servers humming, providing information and services to the enterprise and public. The depth of their resilience, their ability to innovate, source strategically and quickly grasp and employ the latest technical advancements speak well of them and of America’s cities and counties. The future, with many obstacles kicked aside by a recovering economy, looks very bright.

Wayne Hanson  |  Staff Writer and Editor of Digital Communities

Wayne E. Hanson has been a writer and editor with e.Republic since 1989, and has worked for several business units including Government Technology magazine, the Center for Digital Government, Governing, and is currently editor and writer for Digital Communities specializing in local government. Hanson was a juror from 1999 to 2004 with the Stockholm Challenge and Global Junior Challenge competitions in information technology and education. He self-published three books of fiction and lives in Sacramento with his wife, Jeannie.