Monday, June 08, 2009

The Cloud and State Government..

One of the suggestions in Taxpayers Advisory Board was the state looking into working with other states to develop software systems and applications.

It's an interesting idea but I am not sure that I can see how you would have any real cost savings for years. Why, well the most logical things that could get 'clouded' early would be e-mail. But the state likely has already had significant sunk costs in it's current e-mail solution (Microsoft Exchange) so you would have some support costs you might save with Microsoft. The cost is for gmail professional is $50 a user a year, assuming due the the size of the state employee base we would get that cut to $25. That would likely be a savings over what the state is spending now. However there would be significant switching costs as well as some training costs as well.

Other applications such as Google docs and their spreadsheet product would have more significant switching costs as well as some training expenses.

Also since I suspect the state licenses the entire Microsoft Office suite for a bunch of users eliminating just the exchange support (that is servers and the like) your savings.

As for multi-state applications, well that sounds like an interesting idea. A single heath care payment processing system for several states for example. But that sort of thing would likely require changes in every state in terms of their own processes. There would be switching costs, the costs associated with developing the application(s), training costs as well as hardware costs.

Having worked in software the idea that you could create a major application that multiple states would share is rather hard to believe. Getting all those folks and agencies and states to agree would be next to impossible.

So any savings would be down the road and the costs would be higher in the shorter term.


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