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Minnesota Launches Landmark Microsoft Cloud Collaboration

Office of Enterprise Technology signs agreement to make Minnesota the first U.S. state to house key business applications in a private cloud, officials say.

As states battle deficits and struggle with outmoded IT management models, Minnesota is shifting its digital infrastructure to deliver technology services faster and cheaper through cloud computing.

In a groundbreaking collaboration, the state’s Office of Enterprise Technology (OET) last week signed an enterprisewide service agreement with Microsoft, which officials say puts Minnesota on track to be the first U.S. state to house key business applications in a private cloud environment.

“We in the country face a serious problem,” said Gopal Khanna, CIO of Minnesota, at the National Association of State Chief Information Officers’ Annual Conference in Miami. “Fifty percent of the government will be retiring in the next 10 years. If we don’t re-engineer the process, we’re going to be in serious trouble. Citizens demand 24/7 service, but government is still based on a 9-to-5, 1950s model.”

Communication and Collaboration

Under the agreement, the state’s Enterprise Unified Communications and Collaborations services will be delivered through Microsoft’s Business Productivity Online Suite (BPOS). The partnership allows the state to combine basic business productivity applications in a unified package, which includes e-mail, instant messaging, Web-based collaboration and conferencing provided through Microsoft’s online hosting.

The move, according to state officials, will reduce redundancy and save Minnesota millions of dollars in technology upgrade investments and ongoing costs.

“We should not shy away from the disruption factor as long as the end goal is a more productive environment,” Khanna said. “The agreement allows us to do that. We have the advantage of leveraging Microsoft’s world-class back office.”

Budget Pressure

State and local governments generally have been cautious of the cloud computing concept, due to concerns over the privacy and security of public-sector data. But with budgets shrinking in the past few years, the noted infrastructure benefits — low costs, greater flexibility and higher speeds — have raised the level of interest in cloud solutions.

In the private sector, businesses have been taking advantage of cloud potential for years, capitalizing on remote storage to improve operations. In that sense, Minnesota officials don’t consider the state to be in completely uncharted territory, said Tarek Tomes, assistant commissioner for customer and service management in the state’s OET.

“I don’t think we’re bleeding edge,” he said. “What really facilitated the move was Microsoft as a partner working really hard to understand how public sector conducts its business.”

Broadly 40 million users have access to Microsoft’s cloud-based BPOS, including 3.4 million government users. In the past 18 months, Microsoft has added 400 state and local customers, from large state agencies to municipalities looking to bring security, privacy and scalability to their IT consolidation choices, according to company representatives.

“Government needs to be thinking the same way the private sector takes for granted,” said Stuart McKee, national technology officer for Microsoft’s U.S. Public Sector organization.

Security Concerns

But, of course, the public sector has different privacy and security demands than private industry. In Minnesota, Khanna said, officials have spent the past two years developing cyber-security policies and procedures. The new agreement helps with the state’s security posture as BPOS applications will be delivered online through a direct connection to Minnesota’s secure network. No Microsoft employees can access it, Khanna said.

“We chose to use our enterprise infrastructure as the foundation for our cloud infrastructure,” McKee said. “Even though security is in the cloud it’s going to leverage 20 years of work.”

According to Minnesota officials, the scope of the new Unified Communications and Collaboration service delivery agreement encompasses all of the state’s executive branch agencies. But other OET customers, including local governments, cities, counties and educational entities can participate in the agreement.

Early Adopter

The move to the cloud comes as a climax of sorts as Khanna will resign from his post in December. Since his appointment as the state’s first CIO in 2005, Khanna has led the OET, overseeing statewide IT planning, budgeting and program execution, and advising the governor on strategies to enhance internal reform to better serve state citizens.

In terms of cloud computing, Khanna believes Minnesota’s agreement with Microsoft is only the beginning. In the near future, he envisions a world of multiple clouds in the public sector, where governments manage applications in-house, but utilize remote and secure private environments for storage.

“We cannot afford to be bashful about being an early adopter,” Khanna said. “Why shouldn’t government be at the cutting edge? That requires not only exploring the possibilities, but having the courage to apply and use them.”