The federal government hopes to save millions of dollars a year by renting expensive IT services rather than buying them.
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The Australian Government Information Management Office issued three papers this week examining the risks and advantages of ''cloud computing''.
![Cloud Computing. Photo: Karl Hilzinger Cloud Computing. Photo: Karl Hilzinger](/images/transform/v1/crop/frm/silverstone-ct-migration/a96962bf-ee54-4d48-8bcf-041bd10c99f6.jpg/r0_0_729_528_w1200_h678_fmax.jpg)
The concept involves agencies hiring data storage and software, and accessing them through a network such as the internet (the ''cloud''), instead of buying or developing them themselves.
Many companies have embraced the cloud to save money, though only a few parts of the federal bureaucracy use it.
A review of the government's IT use in 2008 recommended cutting data-storage costs as a priority.
The review's author, Sir Peter Gershon, said better planning of storage could save taxpayers up to $1 billion over 15 years.
A senior information executive at the Department of Finance, Glenn Archer, said yesterday cloud computing was not a financial cure-all, but it gave agencies the ability to use their IT budgets more efficiently.
He said if agencies needed to share a large amount of data or to access a lot of processing power for a short time, using the cloud could prove far cheaper.
He cited the example of Google's online translator, which could be added to government websites at little or no cost.
However, Mr Archer also warned agencies against locking themselves into long-term contracts.
''Technology is changing so rapidly,'' he said.
What might seem fantastic technology at a great price today might not be in two years' time.
The federal government spends about $810 million a year on data storage and related equipment.
One of the papers issued this week examines how cloud computing may affect privacy, particularly when external companies handle government-owned information.
It warns: ''Moving data into the cloud means that, very often, it will be processed and stored outside of Australia.''
The paper also notes that a United States law, the Patriot Act, allows the US government to access data held by American companies, ''irrespective of the geographical location, without advising the contracting party''.
However, Mr Archer said, ''We don't encourage any agency to look to use the public cloud for storage of private or sensitive information.''
He said this data could instead be shared only on a ''private'' or ''community'' cloud, to which access was tightly limited.