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Pennsylvania allots $681M for cloud-based data storage

| Saturday, Aug. 23, 2014, 12:01 a.m.

As state government attempts to keep up with increasing demand for computer storage space, Pennsylvania will spend a projected $681 million to establish one of the largest cloud-based data systems among state governments.

Pennsylvania this summer began a seven-year contract with Montgomery County-based Unisys Corp. to convert its data storage from state-owned and operated servers to a cloud format.

Cloud systems allow people to access programs and data through the Internet rather than a direct connection to a server, offering flexibility in storage.

“We keep needing more and more storage, more and more computing power,” said Dan Egan, spokesman for the state's Office of Administration.

He said the contract will save the state $180 million annually in IT maintenance costs.

Todd Sander, executive director with the Center for Digital Government, said it is a national trend for local and state governments to move toward cloud services, but the size and price of Pennsylvania's contract is among the largest.

“Technology is changing so quickly, it's hard for state and local governments to keep up with their internal staff,” he said. “It's hard to find the people that they need in key positions, and when they do find them, it's very hard for them to competitively pay them for government salaries.”

The contract took effect in June, the result of a procurement process that began in May 2012. Unisys scored the highest in a competitive bidding process that included HP and Xerox. Though its technical score was lower than that of Xerox, Unisys made up points on pricing.

Bid documents from Xerox were unavailable to be released, according to a company spokesperson.

Brian Daly, spokesman for Unisys, said the company has similar deals with the California State University system, the federal Department of Energy, and the National Archives.

Egan said the $681 million figure for Pennsylvania is based on estimates of projected use. The contract has no spending minimum or maximum, he said.

Egan said the state can opt to buy more services from an ever-growing catalog. As part of the package, the state will have a backup server at an undisclosed location outside Pennsylvania, he said.

Before pursuing the cloud contract, the state was confronted with the prospect of finding a new home for one of its seven data centers, which is located on former state hospital property in Harrisburg that is up for sale.

The projected cost for a new location, new servers and backup was $481 million, Egan said.

Officials weighed their options. “Do we want to do it in-house, or do we want to get out of the infrastructure business and go into the cloud-based model?” Egan said.

The cloud-based model, he said, will allow state agencies more flexibility in how much data they can store and use.

In 2012, the Center for Digital Government gave Pennsylvania an A- grade for its technology, placing the Keystone State among the top eight states.

Melissa Daniels is a staff writer for Trib Total Media.

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