HM Revenue and Customs (HMRC) has announced it will be the first government department to transfer all of its data to the cloud.
The deal with Skyscape Cloud Services, which also offers cloud computing services to UK police authorities, is part of the government's efforts to centralise all of the data across departments and establish a common standard, in order to render the system more effective and efficient, and also cut costs.
Skyscape will offer computing and storage services to HMRC, with plans to have all of the data transferred by spring 2013.
At the moment, departments across the government store all of their data in local offices. Not only is this a costly system, it also means it is fragmented across the network and no common standard has been installed, disabling the possibility of quick communication between departments.
Phil Pavitt, chief information officer at HMRC, said: "This change will save over £1 million a year in running costs and will increase reliability and security of HMRC's internal IT services.
"The Skyscape contract is a major step for HMRC in moving away from traditional ways of working with large service providers. And it's a great example of how we're exploring smarter, more innovative solutions that make life simpler for us and help us provide a better deal for our customers."
Skyscape's chief executive, Philip Dawson, is just as optimistic as to what this means for the future.
"Centralising storage into the cloud will bring immediate and long term cost savings to HMRC. It will also allow them to achieve greater business agility by having data in a central location. Combined with last week's announcement about Skyscape's win with Government Digital Services, [this] further demonstrates government's commitment to driving through the aims of the Government ICT Strategy, the underpinning G-Cloud strategy, and also the Procurement Pledge which supports increased engagement with SMEs."
This marks the first deployment of what are called G-Cloud services, which is a programme of work to oversee the adoption of cloud computing cacross the various government departments.
The move to the cloud will speed up the deployment of the Government End User Device Strategy, a strategy aimed at increasing the efficiency of the public sector and improving the front-line services by allowing work to be done from any location, with the option of sharing services across departments.
Skyscape won the bid to become the primary contractor for hosting the new centralised government website, gov.uk, set to replace Directgov and Business Link by mid-October. The deal with HMRC is the first major service contract to have been made through the G-Cloud framework and the first department move to the cloud.
While the cost-cutting benefits this move to the cloud offers, not everyone is as optimistic about it as the government. As Ian Masters, sales director in Northern Europe for Vision Solutions, a replication software company, explains, things are a little more complicated.
"Cloud storage has the potential to reduce costs for government customers - after all, each department would not have to worry about the physical hardware and maintenance, and just pay for the service. In theory, this should be cheaper than doing it individually.
"However, cloud offerings do not currently have a set of legislation or standards in place, that government bodies can use to compare their services with other options. Secondly, the responsibility for data protection still resides with the government organisation, rather than the cloud provider, according to the ICO, so there is an overhead associated with that security planning that has to be thought about.
"The EU is bringing together public sector organisations and the industry to thrash out standards around portability, security and procurement. However, these will take at least a year to come through.In the meantime, cloud storage can reduce costs for government, but anyone considering the move does have to remember their own responsibilities around migration planning and security."