Microsoft CEO Steve Ballmer and New York mayor Michael Bloomberg announced a cloud computing initiative this morning that is projected to save the city $50 million over the next five years. Cloud computing refers to a setup where a single remote entity, in this case Microsoft, powers the resources, software and information for all the city’s computers, much like a single company could create and maintain a city’s electrical grid.
The partnership was made possible by a new executive order the mayor signed into law, which centralized planning and oversight of the city’s information technology under a single agency, the Department of Information Technology and Telecommunications — DoITT for short.
Before today, every city agency handled its own IT and software licensing. To give some perspective on how wasteful this is, imagine if the Department of Education had to source, install and manage it own plumbing in every one of its buildings. That’s the analog equivalent of letting each agency control its own IT. Not only did these agencies lack the expertise needed, but by acting independently they also lost out on massive economies of scale.
Under the new plan, Microsoft will power all the city’s computer needs, consolidate their server and data storage, and allow city employees to choose from different levels of licensing, depending on their needs.
As with many of Mayor Bloomberg’s efforts, this initiative tries to bring the best of the business world into the realm of government.
To deliver services efficiently and function at the highest level, City employees need the same technological resources that top private sector businesses provide to their employees. By capitalizing on the city’s buying power, consolidating dozens of separate City agencies licensing agreements into a single one and paying for software based on use…we’ve found ways to offer our employees Microsoft’s newest, state-of-the-art computing tools while reducing cost to taxpayers.
Cloud computing is certainly the next big thing in business and government, and it’s great to see New York embracing the technology without getting bogged down in the debates over privacy that have snarled efforts elsewhere to shift services to the cloud.
As for Microsoft, the deal is a big win, not only because New York provides so many customers, but because the endorsement of a relatively tech savvy mayor like Bloomberg adds a boost to their reputation. Microsoft will have to avoid stumbling the way Google’s cloud services did in LA. We just hope city employees won’t have to snyc with Windows 7 Mobile, which has yet to debut a solid smartphone or tablet.
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