In my conversations with different government organizations about Cloud Computing, three distinct challenges keep coming up.
#1: Reducing Costs. More than ever, agencies have the pressure to reduce costs at all levels. Dealing with shrinking budgets and demands for newer services has forced agencies to carefully look for areas that may be optimized or simplified. While many agencies struggle to keep the lights on, they are forced to look at alternate ways to provide services. Cloud services has become an attractive way to address those demands and provide new services to its citizens.
The pressure to reduce costs has also forced agencies with common needs to work together and find ways to collaborate and simplify operations. This is different from the past, where agencies could not justify or were not interested in combining computing resources with other agencies.
#2: Agility and Scalability. At the same time they are forced to reduce costs, agencies are also forced to achieve new levels of agility and innovation. The constant demand for new services and deployment of new technologies have forced agencies to consider services in the cloud in order to simplify and reduce their infrastructure footprint. While agencies may be solely focused on reducing costs, cloud applications can not only reduce the costs, but also give agencies a new level of agility and scalability.
The cloud allows agencies to pool resources to serve multiple customers using a multi-tenant model. These shared resources give agencies a sense of independence and elasticity, since resources may be dynamically assigned according to demand.