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State CIOs See Rapid Shift to the Cloud

Cost, pressure and business demands are pushing states toward hosted infrastructure and apps.

Reservations that state IT leaders once had about putting government systems in the cloud are fading fast. State CIOs interviewed at the NASCIO Mid-Year Conference the week of April 27 are aggressively adopting cloud-based services, with some saying they intend to run anywhere from half to almost all of traditional data center infrastructure on hosted platforms within the next few years.

Although states vary widely in their cloud adoption and sophistication, they’re all being pushed toward private and commercial cloud services by the need to cut IT costs, modernize systems, and speed up the deployment of new applications and services, CIOs say.

On the move

Even states that previously sat on the sidelines are moving now. Kentucky’s Jim Fowler is one of several state CIOs who want to transition to the cloud in a hurry. Kentucky may have just a handful of cloud deployments today, but he expects that to change fast.

Video: Kentucky CIO Jim Fowler says government can’t afford to stay in the infrastructure business.

 “I’m a strong proponent that government will be out of the infrastructure business. We can’t afford it,” he said. “In the next five to seven years, I suspect that 80-plus percent of our infrastructure will be off our premises and in the cloud somewhere."

Kentucky has an RFP on the street now for cloud-based storage, Fowler said, which is intended to test how well the cloud model works for state agencies. If that deal is successful, the state has several other “as-a-service” projects in the pipeline.

Activity also is picking up in Alabama, where the state is implementing a cloud-first policy, said CIO Brunson White. A few projects already are underway, including deployment of a cloud-based CRM to serve as the front-end for a new health and human services eligibility system.

“It’s a significant lift for us, cost-wise,” White said. “But we think that’s a better way to address the HHS space -- where we can have one gold client in the cloud that everybody connects to for dealing with those constituents.” The CRM platform ultimately could become the standard for all customer service interactions with the state government, he added.

Committing to cloud

While Kentucky and Alabama gear up, North Carolina is making a serious commitment to the cloud in the form of hosted email. The state is halfway through an initiative to move 70,000 employees to Microsoft’s Office 365 platform. The project puts all North Carolina agencies on a standard email system, solving a problem for state CIO Chris Estes.

“Since the governor took office, he’s wanted to see the calendars of cabinet secretaries, and he hasn’t been able to do that because everyone’s on their own version of Microsoft Exchange,” Estes said. “Now cabinet secretaries’ calendars can be viewed by the governor and vice versa. It allows for the true teamwork that the governor has asked us to do.”

Although saving money is an important goal for cloud projects, Estes and other CIOs also view agility as a key driver for expansion. For instance, North Carolina intends to use cloud-based platforms to rapidly augment internal computing capacity to handle events like tax season or Election Day.

Video: Alabama CIO Brunson White says as much as 60 percent of data center systems in has state eventually could be in the cloud.

“The cloud helps us respond quicker to business needs,” he said.

The need for speed is spurring more cloud use in Colorado too. State CTO David McCurdy says he’s evaluating more than 1,200 existing applications, and deciding whether to keep them in-house or put them in the cloud as they are upgraded.

Cloud is the preferred option when appropriate solutions are available, McCurdy said, which is the case with an upcoming project to replace Colorado’s human resources system. “One of the things we’re building into the RFP is that we’re looking for SaaS-based solutions that meet NIST standards,” he said.

Even when the state needs to create its own applications, it’s using hosted platforms like Salesforce to standardize and streamline application development. Besides speeding up app creation, committing to these frameworks gives the state a clear roadmap for the future, McCurdy added. “If you’re going in 100 different directions, you’re not going build the talent pipeline you need for success.”

Despite growing reliance on cloud services, neither McCurdy nor Estes expect to shut down their data centers soon, however.

 “We have a lot of legacy technology, some of it over 30 years old,” Estes said. “So just going on the lifecycle of existing technology, it’s going to be pretty hard to say that everything will move to the cloud over the next five years. But I think we will run important applications in the cloud, and we’ll be more aggressive in doing that.”

Not business as usual

Even if government data centers hang around for a while, the cloud will change what goes on inside of them. Ohio is a good example. The state is consolidating agency data centers into the central State of Ohio Computing Center, creating a private cloud that’s run jointly by government employees and IBM. As state employees retire or transfer to new jobs, the company will assume greater responsibility for running the cloud.

“Over time, we’ll have IBM operating a private cloud in our computing center,” said state CIO Stu Davis.

A primary goal of the initiative is to slash infrastructure spending and speed up the delivery of valuable services. Before launching the consolidation plan, Ohio spent about 80 percent of its IT dollars on infrastructure and operations, Davis said. Now, spending is split evenly between operations and application development, and Davis wants to push the ratio to 70/30 in favor of app development in the future.

Video: CIO Chris Estes explains North Carolina’s “try before you buy” approach to deploying cloud services.

To complement the private cloud, Ohio is developing a portfolio of commercial cloud services, he added. “We’re leveraging the salesforce platform as a springboard to get applications produced quicker. I also think we’ll seriously investigate storage at some point. We’re competitive now, but it’s only a matter of time before we’ll have to buy a bunch of infrastructure to support it, and I’m not sure that makes sense.”

As states add more hosted services, they’re also looking for help with monitoring the performance of cloud contractors. In March, Georgia hired integrator CapGemini to oversee its growing services portfolio.

“They’ll help us manage all these third party vendors to ensure that we have a flexible, plug-and-play platform going forward,” said Dean Johnson, chief operating officer for the Georgia Technology Authority. “It really enables us to take full advantage of expanding our portfolio in the cloud market.”

CapGemini will track day-to-day activities of cloud contractors and provide a performance dashboard for GTA management, Johnson said. One of those contractors will be Microsoft, which is wrapping up an implementation of Office 365 for 40,000 state users.

Bumps in the road

Moving to the cloud comes with a few other challenges, too. Although most CIOs view the cloud as way to let internal staff members focus on more important projects, that transition isn’t automatic. Employees who’ve spent their careers tending infrastructure will need help to become effective contract managers, business analysts or app developers. “Our workforce isn’t necessarily skilled properly, so there’s a lot of training and development, along with new hiring and recruiting,” said Estes.

Video: Ohio CIO Stu Davis explains how his state is expanding its private cloud.

Network capacity is another concern as states move toward commercial cloud services. That’s particularly true in Alaska, where geography creates unique problems. “We have fiber connecting us to Washington and Oregon, but it’s been kind of a restrictive thing to put cloud services so far away,” said state CIO Jim Bates.

Still, Alaska’s Department of Labor recently shifted mainframe applications to a commercial cloud provider, said Bates, and the state is weighing a move to cloud email. He expects new fiber deployments to boost bandwidth over the five to six years, making commercial cloud services more viable. Those improvements coupled with a tight state budget make the cloud inevitable part of Alaska’s future.

“Falling oil revenue really hurt us this year,” Bates said. “We have to shrink the size of government so it’s sustainable on our oil revenues, and cloud services will be a big part of that.”