Agencies climb cloud learning curve amid post-COVID realities
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Digital transformation and staffing challenges are pushing state and local agencies into cloud-first strategies and more IT outsourcing, a new report found.
Most state and local governments are embracing a cloud-first strategy and outsourcing more of their IT operations amid staffing challenges and a need to maintain services, according to a new report.
Disruptions forced by the COVID-19 pandemic, including the growth in remote work and an increase in resignations, forced governments to rethink their strategies around service delivery, according to the tech research and advisory firm Information Services Group. States also must contend with legacy IT systems reaching obsolescence, the report said.
Those pandemic-related disruptions and falling tax and licensing revenues forced agencies to find ways to serve constituents better for less. Those pressures precipitated a greater reliance on the cloud, even as many public sector organizations remain uneasy about its security or their lack of expertise in cloud budgeting or procurement.
In a statement, Nathan Frey, a partner in ISG Public Sector, said public sector agencies can “no longer ignore the cloud” due to the pressure of less staff and funding.
Separately, the desire to better manage their cloud efforts has prompted many states to hire cloud architects or other specialists to help them manage their relationships with vendors and ensure their goals are aligned with the state’s strategy.
The last couple of years have forced state agencies on what ISG called a “steep learning curve” as they manage their cloud offerings. That learning curve then became even more pronounced when federal funds from the American Rescue Plan and the bipartisan infrastructure law enabled rapid digital transformation that ISG said agencies had not considered in decades.
Meanwhile, cloud operators have developed offerings specifically for the public sector, which typically employ a variety of software solutions as agencies migrate away from on-prem storage. And while some public-sector workflows may not be appropriate for management in the cloud, ISG said it expects demand for managed cloud services to keep accelerating as public sector cloud environments mature.
ISG expects the cloud growth to continue through 2025. Bruce Guptill, a distinguished analyst and executive advisor said the group is seeing “greater demand” for services that transform business and IT, and believes it will “accelerate” in the next three years.