Many of us in the U.S. are busy writing checks to the government in time for tomorrow’s federal tax deadline. Despite all that we’re paying, the Center on Budget and Policy Priorities reports that governments continue to face large, budget shortfalls. According to the center, the recession that started in 2007 caused the biggest collapse in state revenues in U.S. history, and thirty states will have counted budget shortfalls totaling $49 billion by July 1, the time the new fiscal year begins on July 1.
How are governments like these stretching taxpayer dollars further?
According to some estimates, governments can save as much as 25 to 50 percent by moving to the cloud. In the current environment, state and local governments are doing everything possible to optimize their budgets. One way they are doing more with less is by moving some or all of their productivity applications to the cloud with Microsoft Office 365. Indeed, as KPMG reports, a recent survey found that 28 percent of government executives predict their agencies will allocate over 10 percent of IT spending to the cloud this year. Lyon Poh, Head of IT Assurance for KPMG in Singapore, and a specialist in cloud consulting said in his company’s report: “Cloud will be an important component of government IT infrastructure because there is growing recognition that cloud adoption will quickly become a key tool for public sector, cost reduction”.
In weighing cloud options, it’s important to look beyond the annual, user fee to evaluate the total cost of ownership. As Washington, D.C. learned the hard way, critical factors such as user productivity are at stake. While Google Apps may seem cheaper, it’s missing critical features and functionality that organizations get at no, additional cost with Microsoft products. Adding features needed to make Google Apps robust can cost governments in deployment, IT support, user training, and lost productivity.
Meeting Demands with Fewer Funds
Many government agencies choose Microsoft online services after considering other options. The State of Minnesota chose Office 365 because it didn’t have the budget to manage a new, on-premises solution and wanted to improve cross-agency communication and collaboration. “As the state continued to face reforms, we needed to rethink how we could broaden our delivery of IT services centrally, while meeting the demands of shrinking budgets,” says Ed Valencia, Chief Technology Officer for the State of Minnesota.
By transitioning to Office 365, state officials realized they could reduce administrative costs while maintaining a highly reliable, secure platform. Says Valencia: “Office 365 will provide tangible cost reductions through economies of scale. But we feel this shift to a cloud-based strategy is more about the benefits from an opportunity cost perspective. Being on an enterprise, hosted platform means we no longer have to dedicate so much of our time and energy to keeping the system working, and instead we can focus our efforts on being more innovative with these tools.”
Lowering Total Costs
Klamath County, home to almost 70,000 residents in Oregon, looked at different cloud alternatives, ultimately adopting Office 365 as a way to decrease costs and free up IT staff for more strategic projects. “It was really a cost-of-ownership idea,” says Randy Paul, Director of Information Technology for Klamath County. “We determined that we were going to be able to get more bang for our buck by putting this in the cloud.”
Moving to Office 365 has enabled the county to refocus their IT efforts. “We’ve got more projects now than we have ever had before. By moving messaging to the cloud, we’re able to reposition our existing staff to projects that actually make sense,” says Paul. Even more, Office 365 comes with the service-level guarantees that the county was looking for. So, if interruptions do occur, the county will be reimbursed for its downtime. Finally, only because the county chose a Microsoft solution can Paul explain: “Because the Office 365 apps are basically a web version of the Office 2010 apps that we already own and use, it really makes a lot of sense to keep that user interface consistent. The web tools are very consistent and flow very nicely from the experience they have on their desktop.”
Finding a Flexible Solution
For the City of Rome in Northwest Georgia, Office 365 offered a highly flexible, cost-effective solution. City officials wanted to provide email to employees in the field who had not been able to use city-based email. They didn’t want the hassle of constructing new network connections, or the cost of ripping and replacing their existing, on-premises system. “Until we get our total ROI out of our current infrastructure, it really doesn’t pay for us to completely transition [to a cloud environment],” says Johnny Bunch, Director of Information Technology for the City of Rome.
Instead, the city took a hybrid approach, not available from Google, and important to many of our customers. They continued to serve existing employees on-premises using Microsoft Exchange, and deployed Office 365 to field users. The rollout was straightforward and rapid, with no need for third-party support. “We did this one by ourselves,” says Bunch. “It saved taxpayers some money.”
Reducing Overhead Costs
Sometimes, achieving email cost savings is the biggest, near-term focus. Government officials in Summit County, Utah, found that they could reduce their burden on IT staff and lower overhead costs with Microsoft Exchange Online, which is also available as a part of the Office 365 service. Initially, county officials considered upgrading to a new, on-premise system, which would require money for new hardware, software licenses, and installation.
“In the first calculation that I made, just on the software licenses and hardware alone I was going to save about $5,000 over a ten-year period, which isn’t a whole lot. But when I throw in there the costs of cooling and power, and training and administration, I found I was saving a ton of money.” says Summit County Director of IT, Ron Boyer. “By outsourcing the software, hardware, maintenance and administration burden to Microsoft, you free up time and allocate resources to those who are the experts at it anyway.”
Making Every Dollar Count
In this time of spending cuts, government agencies look for innovative ways to improve services while lowering costs. Office 365 makes it possible to do just that – without compromising important features and functionality.