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States Unite to Save Big Bucks on Cloud Services

Taking the lead for 36 states, Utah is expected to issue a National Association of State Procurement Officials (NASPO) cloud computing contract in August that helps states get the best deal for equipment and software by bundling their shopping lists into a single bid.

Utah is currently evaluating the solicitations from companies offering deals for states on Software-as-a-Service, Platform-as-a-Service, and Infrastructure-as-a-Service for cloud services, Kent Beers, director of the Utah Division of State Purchasing, told MeriTalk.

“Savings results from volume discount pricing received from the combined purchasing power of multiple states joining together and from reduced administrative overhead resulting from one procurement being conducted for and in benefit of all participating states,” Beers said in an email response.

The contract (Solicitation CH6012) is being handled by NASPO ValuePoint Cloud Solution, the cooperative procurement effort that can provide high-quality, cloud-based service providers at discount prices.

Finding efficient cloud services is on the minds of many state purchasing officers as their terabytes of data continue to explode, and they have no secure place to store the information.

New Mexico and Idaho are two of the 36 states that have signed letters of intent to participate in the contract. Idaho, for example, is looking for cloud computing services for agencies that need more storage and backup space in the cloud. That includes agencies that handle hunting and fishing licenses, taxes, and health and welfare issues.

“As with most of NASPO offerings, we see value in a contract that consisted of a well-crafted contract with several states. It’s a monumental effort for the states,” said Sarah Hilderbrand, administrator of the Division of Purchasing, Idaho Department of Administration.

“A lot of the savings takes place because states won’t have to purchase and maintain all of the hardware–store all in house, buy the equipment and house it, or have people on staff to upgrade,” she added.

Cloud computing has both risks and rewards, said Lawrence Maxwell, New Mexico’s director of state purchasing.

“Cloud solutions can increase capacity, and flexibility, but at the same time can expand security problems in some cases,” Maxwell said. “Further, there can be connectivity problems that the state CIO may determine to be significant enough to compel him to not allow its use.”

It’s impossible to estimate the value of it at this time because it’s a new contract, Beers said.

“Some new contracts have significant usage within the first few years, others take a number of years for the usage to build, and some never do take off,” he said. “We are hoping that the cloud contract fills a significant need for states and political subdivisions.”

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