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Study: Cloud Computing Cuts $5.5 Billion Annually from Federal Budget

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Study: Cloud Computing Cuts $5.5 Billion Annually from Federal Budget
The federal government saved nearly $5.5 billion a year by moving to cloud services. But it might have saved up to $12 billion if cloud strategies were more aggressive, a survey of federal IT managers found.

The study, drawn from interviews with 108 federal CIOs and IT managers, was published by MeriTalk Cloud Computing Exchange, a community of federal government leaders focused on public-private collaboration in Washington, D.C.

The IT managers surveyed also reported spending 11 percent of their current, fiscal year 2013 budgets, or $8.7 billion, on cloud computing.

The chief impediment to implementing cloud services was security, listed by 85 percent of federal IT managers. Also of concern were agency culture, named by 38 percent of managers, and service levels, listed by 32 percent of managers.

Seeing the Cloud Through the Lens of Value
Enterprises that look at the cloud only through the lens of technology will be left behind by more agile competitors that use the cloud to develop innovative new business models based on faster time-to-market, new modes of customer interaction and more efficient operating models, according to Mike Pearl of PricewaterhouseCoopers.

Pearl, a partner and cloud computing leader at PwC, offered his take on cloud computing in a column on Forbes.com, and made a strong case regarding the business value of implementing a cloud strategy.

With a solid cloud business platform, companies will be better positioned to innovate around new products and services to generate additional sources of revenue, he said. For example, many new online media broadcasting offerings use innovative video interfaces over high-speed broadband developed within a cloud environment to create new business models.

"Far from being the latest technology craze, cloud computing should be regarded as a strategic asset that helps organizations transform their business models by creating new products and services and new modes of engagement among employees and with customers," Pearl wrote.

Cloud Computing Benefits Charity IT Infrastructure
Cloud computing allows charities to scale up their IT infrastructure in times of peak demand, such as during Sport Relief, one of the U.K.'s biggest fundraising events, according to The Guardian.

Creating an IT infrastructure that is able to cope with a massive volume of traffic in a short amount of time brings to the fore a host of issues. Questions such as how to do it cost-effectively and how to make sure everyone who wants to make a donation is able to are at the front of the minds of organizers.

It seems the answer to this challenge lies in cloud computing.

Rather than having a room full of servers that go unused for more than 300 days of the year, cloud computing offers the opportunity to scale-up capacity when needed.

This approach means Sport Relief doesn't have to run physical infrastructure all year but can scale up by a factor of around 400 times in the peak period.

More Stories By Patrick Burke

Patrick Burke is a writer and editor based in the greater New York area and occasionally blogs for Rackspace Hosting.

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