One of the advantages of social media and web 2.0 technologies are their relatively low cost of use. Part of the reason for this derives from the use of “cloud computing” – which shifts data and software from desktop PCs and servers to the Internet (the cloud is just a metaphor for the Internet and its networked typology). This allows for many individuals and organizations to utilize computing infrastructure that they might not otherwise be able to afford or maintain on their own to access and deliver files and applications to anyone with access to the Internet.

In the era of public budget cuts, taking advantage of cloud computing seems like a natural way to reduce government expenditures on information technology (estimates for the cost of email alone range from $100 to $300 per year, per public sector employee). In addition, there are security and redundancy benefits to spreading an agency’s data among computer centers around the world, versus in one location where it might be more vulnerable to natural disasters or other events that might compromise availability.

From the perspective of some technology officers in government agencies, moving to cloud computing is potentially worrisome – as it means devolving some control over the organization’s sensitive data to a third-party provider of data storage or software. Yet that hasn’t stopped some cities from forging ahead. Results from a recent survey indicate that nearly half of all local governments are already using some form of cloud computing.

Major internet companies and software providers have launched software as a service (SaaS) packages aimed at large enterprises, and are rushing to attract governments as customers. Microsoft has launched a cloud computing platform designed to run applications already developed for Windows servers, and has built a data center specifically designed to host government data. Search engine giant Google has also been successful at marketing its hosted email and productivity software package called Google Apps.

In 2008, Washington, D.C.’s CTO Vivek Kundra (who now serves as the federal government’s Chief Information Officer) opted to adopt Google Apps for the city’s 38,000 employees, claiming it would save the city $3.5 million. In 2009, the City of Orlando, Florida followed suit, estimating it would cut its costs for providing email in half. The City of Los Angeles also has opted to provide its employees with hosted email using Google Apps, though recent news reports indicate the migration has not been going smoothly.

Still, security remains a concern. Last January, Google admitted that internet hackers had successfully stolen data off its computers – including information about its password system that controls access to the company’s web services. And before Los Angeles agreed to its contract with Google, the city negotiated a clause allowing for unlimited damages in case of a security breach.

One alternative to mainstream cloud computing is the development of specialized platforms and facilities designed for the higher security requirements for public data – a strategy which Microsoft has pursued. Similarly, cities and government agencies could work together to create their own private clouds that supported shared and customized applications, along with email and data storage.

One thing is certain. Given that social media and Web 2.0 technologies are likely to continue to be important tools for communicating and collaborating with citizens, government will need to get comfortable with cloud computing. While concerns around security remain – the benefits of lower costs and increased capacity to deliver rich data-driven web tools can help public agencies fulfill the promise of more open, transparent and efficient government.