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The State of Cloud in State and Local Governments


The pandemic affirmed the flexibility and power of cloud-based systems, but state and local governments have a long way to go.

The COVID-19 pandemic wasn’t most state and local governments’ first foray into the cloud, but the technology’s ability to help governments rapidly pivot as offices closed and services shifted online may have permanently accelerated the pace of adoption.

“CIOs needed something; cloud was it; and they just moved,” says Teri Takai, vice president of the Center for Digital Government (CDG).

Government leaders at all levels discovered that the cloud-based systems and applications in their portfolio helped them meet pressing needs, including remote access to applications for employees and new digital resources for citizens and businesses.

“Those that did move to the cloud before the pandemic did better during it because the infrastructure was in place,” says CDG Vice President Phil Bertolini. “The pandemic exposed that legacy systems needed to be modernized, especially around citizen engagement and remote technologies.”

A Gradual Journey

Even before the pandemic, cloud applications had been making inroads into state and local government — sometimes as part of a comprehensive strategy, sometimes in the conspicuous absence of one.

“The reality is that governments were slowly moving to the cloud before the pandemic, whether they thought about it or not,” Bertolini says.

While each government’s cloud journey has been different, many started with email services, which offered improved capabilities at the same time they eliminated costly in-house servers. Then came software-as-a-service products, typically discrete applications hosted in the cloud by their provider to address a specific use case. Functional solutions such as geographic information systems (GIS) used across multiple agencies or departments have also proven natural fits for cloud adoption.

Some state and local governments have followed in the footsteps of the federal government by implementing overarching IT strategies focused on cloud adoption. In 2011, the federal Office of Management and Budget (OMB) issued a “cloud first” strategy, stating that federal agencies should evaluate cloud computing and shared services options whenever considering new technology investments. OMB updated this guidance in 2018 with a “cloud smart” strategy which emphasized developing workforce, security, and procurement capabilities and selecting the right applications for cloud migration.

Even so, the pace of adoption has been slow but steady in recent years. The Center for Digital Government’s 2018 Digital Counties Survey found most respondents — 78 percent — had fewer than 20 percent of their systems and applications in the cloud. By 2020, the percentage had fallen to 60 percent.

But there’s still a long way to go. Only 12 percent of 2020 Digital States Survey respondents reported that they have now moved more than half of their systems and applications to the cloud, while only four percent of county government respondents had reached that milestone.
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Among the hurdles cited by government technology leaders:

Cost savings. Many IT leaders have found calculating the specific ROI of cloud migration challenging, in part because of the shift from capital to operating expenditures.

“Technology was always a capital expense, written off over time,” Bertolini says. “Now this becomes an operating expense — there were some early struggles for finance people and technologists to get their arms around the fact that your operating budget goes up.”

Security concerns. While cloud providers generally offer cybersecurity capabilities at a scale greater than most governments or enterprises can provide, perceptions have proven challenging to shift. More than one-third of respondents to a 2018 CDG survey said they did not fully understand or appreciate security controls available in the cloud.

Legacy systems. Nearly half of respondents to the same survey said their existing investments in legacy systems made it difficult to migrate. More recent surveys suggest that many state and local government systems and applications still aren’t cloud ready.

Human resource issues. Government leaders have had two main concerns: displacing employees and facing a mismatch between existing IT workforce skills and the ones a cloud environment requires. “People aren’t going to lose jobs, but they’re going to have to gain new skillsets or find partners with those skillsets,” Bertolini says.

What’s Next

Governments have seen “the benefits of modernizing without having systems on premises,” Bertolini says. At the same time, technology leaders must think carefully as they plan their IT roadmap going forward — including the question of what they can and should move to the cloud.

“One of the problems is that governments did a lot, and they did it quickly,” Bertolini says. “The question is, did it add value, and can you make it stick? Can you nurture it and grow it over the longer term?”

Special Content: This article was prepared by the Government Technology Content Studio, which is editorially independent of both the sponsor and the Government Technology editorial staff, who were not involved in producing it.