Tight Budget? Look to the ‘Cloud’

[Commentary] As the global economy struggles through a slow and painful recovery, governments around the world are wasting billions of dollars on unnecessary information technology. This problem has worsened in recent years because of what I call the “I.T. cartel.” This powerful group of private contractors encourages reliance on inefficient software and hardware that is expensive to acquire and to maintain.

When I joined the Obama administration as the chief information officer, we quickly discovered vast inefficiencies in the $80 billion federal I.T. budget. We also saw an opportunity to increase productivity and save costs by embracing the “cloud computing” revolution: the shift from hardware and software that individuals, businesses and governments buy and then maintain themselves, to low-cost, maintenance-free services that are based on the Internet and run by private companies.

The budget crisis will accelerate the move toward cloud services. Governments, businesses and consumers all have a lot to gain, but not everyone will have an equal say at the table. Public and private organizations that preserve the status quo of wasteful spending will be punished, while those that embrace the cloud will be rewarded with substantial savings and 21st-century jobs.