The growth in gov tech funding opportunities has slowed slightly, with only 15 percent in the past 12 months being for cloud computing-related projects.
Still, governments in the U.S. are hoping that the ubiquity of cloud computing will help them better fulfill their mission and save money.
The Texas Alcoholic Beverage Commission (TABC) is one of the government agencies currently turning to the cloud for its next generation of service.
“Over the last few years, TABC has been adopting a really top-to-bottom digital strategy,” said Chris Porter, a spokesman for the commission.
Last year, TABC transitioned from a paper-based license application system to an entirely online platform. Before the transition, it was using a system more than 14 years old, according to Porter.
“The ultimate goal is to have a one-stop shop,” he said. “Everything we do we want to be on this cloud-based system.”
Porter said the transition is being motivated by a desire to reduce costs as well as make it easier for companies that interface with the commission.
And the cloud transition at TABC is continuing beyond the new application system. Currently, it has an RFP out for a new system to put tax identification stamps on bottles of alcohol, which facilitate taxation. The goal is to have a cloud-based system which will allow beverage vendors and distributors to handle the process with less TABC staff involvement.
“What you do now is you go to the TABC website and order [tax ID stamps],” Porter said. “Instead of TABC staff doing that, it will be handled by the vendor.”
There has also been an increasing number of companies and organizations offering cloud services specifically to local governments. The federal government operates cloud.gov as a “platform as a service” aimed at federal, state and local governments to make compliance easier, while Amazon’s AWS, Google Cloud and Microsoft’s Azure all offer services specifically tailored to government users.
These groups offering services to government have good reasons to do so. The industry can be lucrative — according to Government Technology’s analysis, the median contract value for cloud computing RFPs that listed an estimated value is $137,000.
But the high end of these contracts can come with high-end price tags. The City University of New York system’s 2023 budget lists $175 million dedicated to updating its academic systems, including its planned transition to the cloud. Working with OMNIA Partners, a purchasing consortium, a regional office of education in Texas sought proposals for a $100 million contract for a new cloud service provider and legacy app migration.
The increase in demand for cloud services has been accelerated by the pandemic, which forced “fence sitters” to move toward more online services, increased app development within the government industry and the accessibility of the cloud, according to an analysis from Deloitte Insights.
The expansion of cloud computing is leading to increased reliance on data centers. By 2025, the world will annually create, capture or replicate 175 zettabytes of data, according to a 2018 report from the International Data Corporation. That’s roughly equivalent to 22 terabytes of data for every person alive today.
The long-term consequences of this shift are not fully understood. A 2013 study from Lawrence Berkeley National Laboratory, which was funded in part by Google, found that if all U.S. businesses shifted email, software and customer relationship management services to the cloud, the energy footprint of these applications could be reduced by as much as 87 percent.
In 2020, a team of researchers led by Eric Masanet of Northwestern University found that hyperscale and cloud data centers likely exhibit the most energy efficiency, but there needs to be more research to fully understand data center energy use.
*Industry Navigator is a division of e.Republic, Government Technology’s parent company.
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