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Office 365: Governments’ secret weapon for reducing costs

The U.S. Environmental Protection Agency expects to save $12 million over four years. The City of Chicago anticipates saving $1.3 million over the same length of time. And the State of Minnesota expects to save at least $800,000.

Governments of all sizes are finding ways to reduce IT costs while improving efficiency. What’s their secret weapon?

With public sector budgets shrinking in many places around the globe, smart governments are making taxpayer dollars stretch further by migrating from an on-premise environment to Microsoft Office 365 in the cloud.

By moving to Office 365, governments can reduce both their capital and operating costs. And by saving money, they can make taxpayer dollars go further during a time when budgets are tight and there’s often less revenue to work with.

So how exactly can Office 365 save governments money? First, governments can cut back on the capital cost of investing in more computer servers. Second, they can reduce the administrative cost of having to maintain an IT environment. Third, they can lower their energy costs by reducing the size of their data centers. And they can also reduce costs using the many tools within Office 365 that improve employee efficiency.  According to a study conducted by Forrester Consulting, Office 365 delivers an ROI of 321 percent with a payback period of two months for a composite midsize organization. That translates into huge value for public sector organizations!

Among the government agencies that anticipating money saved by implementing Office 365 is the Environmental Protection Agency. The agency expects to save $12 million over four years by moving to the cloud and Office 365. Some of those savings will be in energy costs as the agency relies on Microsoft to operate its data centers. “The EPA will continue to lead the pack on environmental stewardship, and moving an IT environment to the cloud is a natural part of that,” says Greg Myers, vice president of Microsoft Federal. “There is tremendous potential in the cloud, not only for transforming the way government employees work, but also for helping agencies meet their environmental and energy efficiency goals.”

Likewise, the State of Minnesota expects to save hardware and administrative costs with its move to Office 365. The state expects to reduce costs by avoiding future upgrade investments, repurposing existing hardware for other IT purposes, and lowering ongoing maintenance of its on-premise infrastructure. For example, the move to Exchange Online as part of its Office 365 subscription will save the State of Minnesota an estimated $800,000 in future upgrade costs for its existing Exchange Server (calculated using an industry average upgrade cost for Exchange Server). “I am personally very proud of the State of Minnesota for making the shift to the cloud,” says Carolyn Parnell, Commissioner and Chief Information Officer for the State of Minnesota. “We now have what we consider one of the most advanced communication and collaboration ecosystems in the public sector.”

The City of Chicago also anticipates saving money by moving to Office 365. By migrating its email and desktop applications to the cloud, the city expects to help its 30,000 employees perform their jobs more effectively while saving taxpayer dollars, decreasing duplication among departments, and streamlining its operations. Overall, the move is expected to save taxpayers $400,000 per year or $1.3 million over its four-year agreement with Microsoft. “We are leveraging new technologies to streamline and modernize the way we do business in order to provide the residents of Chicago with the best service at the best price,” says Chicago Mayor Rahm Emanuel.

Indeed, Office 365 offers a great service at a great price. That’s why governments are moving to Office 365 — it’s their secret weapon for improving efficiency while at the same time saving taxpayer dollars.

To learn more, please see our Microsoft in Government website.