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2020 Puts Cloud Computing in Government to the Test

State and local public-sector agencies have long been making a move toward “cloud first” and now “cloud smart” strategies. COVID-19 gave them the change to prove whether those investments paid off.

Clouds at sunset
The COVID-19 crisis demonstrated state and local government’s ability to shift on the fly. While work-from-home arrangements were sporadic pre-pandemic, government technology leaders quickly and effectively adapted to the new requirements. In Tennessee, more than half of all government employees were teleworking this spring, and in Massachusetts over 90 percent of back-office staff were working remotely.

Cloud played a key role in empowering the rapid transition to new modes of work. Microsoft, for instance, announced in March that use of its cloud-based messaging and collaboration tools had jumped 37 percent in one week, at one point logging 900 million meeting and call minutes a week.

In the COVID-19 crisis, cloud and software-as-a-service proved their utility, their versatility and their scalability. Government and private-sector technology executives say this practical demonstration will accelerate the adoption of cloud and SaaS going forward. A recent Flexera survey found 59 percent of enterprise IT leaders plan to increase cloud adoption either slightly or significantly as a result of COVID-19. More than one in three executives see the pandemic as an impetus to digitally transform their business, according to a survey by software-maker Wind River.

Government was headed this way already. NASCIO’s 2019 state CIO survey showed 34 percent of IT leaders had a cloud migration strategy in place and 51 percent had a strategy in development. The Center for Digital Government (CDG)* has also been tracking changing attitudes toward cloud technologies in cities, counties and states for several years. COVID-19 has opened up the throttle on those efforts.


Arkansas CTO Yessica Jones said cloud technologies not only enabled state employees to telework, but in many cases made them more productive. / Credit: David Kidd

How cloud helped

In a recent CDG webinar, state IT chiefs from California, Indiana and Arkansas all described the use of cloud and SaaS technologies as key to their successful COVID-19 response.

In Indiana, CIO Tracy Barnes and his team supported some 120 state agencies in the push to work from home, and investments made last fall in cloud-enabled services helped make that transition possible. His department had been piloting Office 365, laying out governance for the use of such tools before the pandemic hit.

“That early investment allowed for us to quickly scale and stand up and expand our footprint, to support the massive work-from-home need that hit us almost overnight,” he said.

California’s state IT shop has been aggressively pursuing cloud since 2016, an effort that paid off in the COVID-19 crisis. CIO Amy Tong reported that 90 percent of some 200,000 state employees were able to transition smoothly to a telework environment.

Hardware presented an initial challenge, Tong said: Existing rules required employees to use state-owned laptops when working remotely, in order to ensure security, but there weren’t enough such devices available. Tong’s office flexed the rules, implementing uniform security protocols that made it safe for workers to access government systems via their personal devices.

The ability to more easily implement new security protocols may be one of the chief benefits of working in a cloud environment. A recent NASCIO survey found that among government IT leaders who have implemented cloud applications and services, 53 percent say those uses are governed centrally. Advocates for cloud and SaaS have long said that centralized governance offers a way to bolster security across an organization.

Tracy Barnes, Indiana
“We have to make sure … that we are delivering service that truly is able to be accessed and utilized by our users across the state. How do we do that with a pending massive budget cut? That’s going to be the big challenge.”  — Indiana CIO Tracy Barnes

The state of Arkansas likewise benefited from cloud, with CTO Yessica Jones also supporting a rapid shift to telework. “When it was time to stand up a call center, and we really needed to do it very quickly, pieces of that call center went to the cloud,” she said. The pandemic unemployment assistance program also ramped up rapidly via a cloud deployment, and cloud has continued to play a role in supporting state employees’ return to work, with SaaS-enabled temperature measuring stations.  

In some cases, the successful transition to telework didn’t just make state employees capable — it made them better.

Jones’ office polled remote workers part-way into the crisis, and while some said they missed the daily interaction with co-workers, “others mentioned that working from home allowed them to pay more attention to long-overdue tasks,” she said. This aligns with private-sector experiences: A recent report from CNBC/Change Research found 60 percent of workers say they are either as productive or even more productive working from home.

Around the nation, cloud and SaaS proved their worth in a number of ways amid the pandemic. The Illinois Department of Employment Security used Google’s cloud-based contact center technology to handle more than 140,000 phone and Web inquiries a day, said Todd Schroeder, director of Global Public Sector Digital Strategy with Google Cloud.

He also pointed to the Chicago Public Health Department, which leveraged their technology to build a health app to deliver important information and guidance directly to affected people.

Cloud offered states a means to meet the need for large-scale remote access to key business applications, even as demand for services from citizens and other key constituents skyrocketed virtually overnight. “It’s the scalability of having services in the cloud that allowed many of these public services to be quickly ramped up to deal with the public demand,” Tong said.  

Jones has reached a similar conclusion. “For this particular event, how things developed so quickly, it really made good sense to just stand up cloud services for whatever the needs were,” she said. One state saw a 400 percent jump in unemployment claims. Legacy systems couldn’t keep pace, and CRM provider Salesforce worked with state officials to swiftly implement a cloud-based solution.

“In less than a week, we set up a virtual contact center, so that no one had to be in the call center sitting at a desk,” said Salesforce SVP of Global Government Solutions Casey Coleman. “With those digital capabilities they were able to work through that backlog, process the applications and get money into the hands of people who were in urgent need of assistance.”

For states already on the journey to the cloud, and for those still waiting in the wings, experts say the successful push to telework this spring could provide the catalyst for accelerated adoption.


The New ROI

While many states have had some form of “cloud first” ambition in play in recent years, finances have proven to be a stumbling block for some. In a shift from legacy-era capital expenditures to a modernized operating-expenditure model, some have found it difficult to offer solid metrics around return on investment.

IT leaders could point to cost savings through data center consolidation as a clear win for SaaS, along with other incremental gains. But the financial adjustment from CapEx to OpEx isn’t apples-to-apples, and that made it hard to nail down a definitive ROI.

With the productivity gains evident in the COVID-19 telework experience, it may become possible to generate a fuller economic argument in favor of cloud and SaaS. That economic argument becomes all the more persuasive, given that many states will face budget cuts as tax revenues decline amid the COVID-19-related economic downturn.

Barnes said the economic considerations will be a key factor in determining his state’s future embrace of modern solutions. “We have to make sure…that we are delivering service that truly is able to be accessed and utilized by our users across the state. How do we do that with a pending massive budget cut?” he said. “That’s going to be the big challenge.”

Indeed, the expected downturn is starting to materialize, forcing creative approaches like Ohio’s recent request of its contractors, including those delivering IT services, to take a 15 percent pay cut on current contracts.

Part of the answer lies in a more aggressive uptake of cloud and SaaS solutions. “Where we can definitely show value and potentially show a decrease in cost and spend, let’s look at what pieces we can start transitioning to the cloud and offloading from our internal support,” Barnes said.

If anything, state CIOs say, tight fiscal times could help them make the case for more as-a-service offerings. “We are in a digital era, which means [we need] continuous investment into digital services,” Tong said. 


Cloud … Next

The move to cloud has been an evolutionary exercise in state government. After initial forays proved successful, many adopted a “cloud first” approach, saying they would consider cloud and SaaS options first as they sought to modernize legacy systems.

More recently, forward-thinking CIOs have adapted this slightly. Arkansas calls its strategy “cloud right,” while California is pursuing a “cloud smart” approach. This emerging terminology points to a more finessed approach to modernization, one that state CIOs say will be reflected in their post-COVID-19 efforts to broaden cloud adoption.

Jones said of her team, “we’re still firm believers” in cloud. But that belief does not equate to blind faith.

“We believe that not everything is a good fit — whether it is the visibility, the cost … the security of the data,” she said. “There are many different things to be taken into consideration before moving an application or data to the cloud.”

Barnes described a similar approach unfolding in Indiana. “Do you aggressively start pushing everything to the cloud?” he asked. Short answer: No. The longer answer depends on the specific application or process, as well as the agency or department that owns or relies on that application. “We always have to be focused on that business need.”

Certain situations may be a natural fit for cloud, “but if the business is not ready, if the business is not capable, if the business doesn’t understand the need and the opportunity with utilizing cloud tools and technologies — then we can’t start pushing every technology and every solution down that path,” he said.

Some applications will be a fit — probably many, as IT seeks to reduce the cost burden surrounding upkeep of legacy systems, while simultaneously building in a new level of digital resiliency in response to the unexpected nature of the COVID-19 crisis.

Cloud vendors say the success of cloud-based responses to the pandemic helped to prove out the case for modernization. IT leaders may have already understood the value of cloud and SaaS, “but now these organizations can point to tangible outcomes. They were able to serve their constituents overnight,” Schroeder said.

Those who may have hesitated in the past — either because of budgetary concerns or fears of breaking ties with their legacy provider — have discovered those fears were groundless. “We proved it all wrong,” Schroeder said.

“This argument that ‘we cannot touch the mainframe’ — well, we had to change it because it couldn’t evolve to meet the pandemic requirements, and it worked,” he said. “It delivered unprecedented volumes of benefit. That will make people think about what else they can accomplish going forward. We are seeing the paradigm shift in motion.”

Salesforce has worked with 35 states during the pandemic crisis, and has also seen those governments leverage cloud in ways that could support further SaaS implementations in the future.

“Our customers will be able to take what they’re already doing and activate new capabilities for the next phase,” said Coleman. “It’s about reopening the workplace safely and figuring out what digital channels need to be put in place [for citizens], in an environment where we still need to be social distancing,” she said.


The Connectivity Question

State CIOs agree that state-level cloud engagements will likely expand more rapidly in the post-COVID-19 world — but only if there’s enough bandwidth to go around. Connectivity will be a key factor in helping to determine how fast and how far they can push their cloud deployments.

“Not every single spot has a broadband connection,” Tong said. “Not every single spot has good Wi-Fi, or a Wi-Fi connection at the speed and affordability that even many of our state employees could manage.”

Barnes said connectivity proved a sticking point during the COVID-19 outbreak. “Even getting employees to work from home in some of our rural areas was a bit of a challenge,” he said. “It’s availability, reliability and affordability — because even in some areas where there is sufficient coverage, it’s not always affordable to actually get connectivity and get those folks up and running.”

The issue will likely need to be addressed in support of future cloud and SaaS efforts. “You have to work very aggressively with the providers in your state to make sure that they realize and see that there is a priority of getting connections … in an aggressive manner,” he said.

Tong pointed to support from Internet service providers and even the FCC as possible means to bridge the gap where connectivity is lacking. This could mean pushing government documents across public Wi-Fi, and while this wouldn’t be inherently risky, it would require a higher level of user awareness. Government workers would need to be taught what kinds of information can and cannot be shared across such a connection while still maintaining appropriate safeguards around privacy and security, she said.

That willingness to explore uncharted territory — some might call it taking risks — may be one fortuitous outcome of the tragedy of COVID-19.

“We actually have this saying — we’re on COVID-19 time — meaning things that typically take two weeks, for example, to do, we need to do in two to three days,” Tong said. “Don’t wait for that perfection. Take the risk. Do the best thinking and discovery, and be methodical as much as you can, and then just go. Move the ball forward.”

Historically risk-averse, government had to act fast in the face of the pandemic. The fact that it was able to successfully shift on the fly may have emboldened some in government IT to pursue projects — including cloud and SaaS — that in the past may have seemed problematic.

Even before COVID-19, many state CIOs had cloud and SaaS high on their to-do lists. The NASCIO survey, for instance, found 92 percent of state IT leaders planned to expand their use of as-a-service models in the next three years. Those stats are supported by Center for Digital Government data from IT leaders in states, cities and counties alike. Looking ahead, state CIOs say they are widening that vision.

Beyond just putting cloud in place in situations where it is appropriate, they are thinking about new strategies for ensuring that those as-a-service solutions are robust enough not just to support today’s uses, but to withstand tomorrow’s unforeseen needs.

“We really need to start thinking into the future in case another event such as a pandemic hits, and how that solution will stand up against that,” Jones said. 

*The Center for Digital Government is part of e.Republic, Government Technology's parent company.


Adam Stone is a contributing writer for Government Technology magazine.