Cloud Storage Pricing Models and Other Considerations for Government


Cloud computing has become the future for a variety of industries and institutions all over the world, including retail and education. However, cloud infrastructure is not limited to only the private sector; government agencies have been rapidly utilizing the benefits of cloud storage. 

There’s a myriad of benefits to utilize cloud computing for government agencies, though federal departments have been less keen on adopting cloud services than the private sector. The lagging cloud adoption by the government can be traced to the need for strident security and technical features. Eventually, it looks like cloud adoption by government bodies will be more accepted. Federal reports on IT spending in 2018 saw an increased effort towards modernizing government technology, with an emphasis on cloud and shared services.  However, selecting a cloud provider for a government agency isn’t quite as simple as it is for a business in the private sector. 


Cloud Storage Pricing Models 

Costs are commonly a key driver for organizations migrating to the cloud. Cloud storage pricing methods vary and some are more favorable for governmental agencies than others. 


Consumption-Based Billing

Most cloud storage providers favor the consumption-based billing model. Like a water bill, customers pay for the amount of cloud computing storage they use each month. Consumption billing is scalable, with users paying for the capacity they expect to use, and can receive more resources if there is a sudden need for more capacity. However, each user’s amount of storage is eventually finite. 

A majority of organizations routinely overestimate their computing needs when they migrate from on-premises storage solutions to cloud platforms. This situation results from a lack of accuracy most businesses and institutions have when determining capacity. Instead of trying to determine capacity volume and solve already existing issues, many companies add more hardware, which further complicates infrastructure re-optimization. For instance, the result may be multiple servers running below their actual processing capacity, but still demanding a great deal of power. 

These inefficiencies can result in sizable swings in cloud storage billing from month to month. It’s critical for organizations to identify where irregularities are located to determine what changes need to be made so as to stop losing money over unnecessary cloud storage capacity.  


Level Billing 

This alternative cloud storage pricing model is far more useful for government agencies and educational institutions with defined budgets. Also known as dedicated billing, this type of cloud storage pricing emphasizes predictability. Government agencies need to know how much money they expect to spend on IT and cloud storage costs so they can configure their long-term budget to meet those needs. 

With level billing, monthly costs of cloud storage are determined ahead of time based on estimated need and capacities so that there is no inconsistency in billing amounts (like consumption-based billing).  Level billing adjustments are typically made on an annual basis, which coincides with the budgetary timeline for most federal agencies and educational institutions. 

However, level billing does not offer the scalability of consumption-based billing. If an organization uses more capacity than paid for, they could find themselves facing increased costs. This is why an assessment of capacity needs to be as accurate as possible for organizations choosing this cloud storage pricing model. 


Other Considerations in Governmental Organizations 

Just as with commercial technology decisions, government cloud storage pricing considerations weigh costs with other advantages. However, cloud storage pricing is not the singular fundamental requirement when comparing cloud providers, security is also a factor. Due to the highly sensitive nature of government computing, cloud storage offered to government agencies must have enhanced security, more so than most private sector options.

Additionally, cloud storage providers must provide FedRamp-compliant services to be authorized for government computing. Though different billing methods may have an impact on government considerations, enhanced security and federal compliance are two additional factors which heavily impact decisions. 


Cloud Storage Costs

Although there are a number of cloud computing options available today, billing can greatly vary based upon the model chosen. Cloud storage costs are a factor when considering cloud computing platforms, though government considerations also weigh heavily on compliance and security. 

Financial constraints in agencies affect how cloud computing solutions are deployed. Though, how much the factoring of costs depends on the agency, government departments have controlled costs by sharing infrastructure and cloud services, such as FedRAMP. 


Virtual and Physical Data Security

Arguably, data security comprises one of the most important considerations for government agencies comparing cloud storage providers. The amount of security enhancements depend on the different types of data being stored and the value of that data. Government adoption of the Internet of Things  has been driving cloud storage infrastructure and software demand. Most responsible for the drive are the Department of Homeland Security, Department of Defense, and NASA - all which need heightened security protection. The emphasis for IoT and cloud storage has been defense-related, with spending related to infrastructure equipment that can safely enable information exchange between cloud storage, sensors, and devices, as well as software elements than enable storage and data processing. 

The more federal agencies deploy IoT sensors to gather data, the more cloud software will be needed for safe data storage. A Govini report from 2016 predicted that government cloud storage spending will boom in future years as more federal agencies and procedures adopt cloud computing models, such as Email as a Service, Platform as a Service (PaaS) and Software as a Service (SaaS), as well as the services that enable their deployments. Direct email and document storage in the cloud has been especially attractive for departments, such as the Department of Health and Human Services, since it provides unlimited storage capabilities, and more flexibility than previous sharing options.  



Cloud provider services adopted by government agencies must first be authorized and federally- compliant vendors. 

To ensure that government employees and department heads choose from cloud vendors with enhanced security, General Services Administration (GSA) published a list of accredited cloud storage providers who meet compliance standards for federal cloud computing. The program, known as FedRAMP (the Federal Risk and Authorization Management Program), features cloud storage providers and IT vendors who have passed extensive security and technical reviews, been granted authorization to operate (ATO), and completed multiple audits. The process is not risk acceptance, but assurances for federal agencies interested in the services that the systems risks have been approved by the Department of Defense (DoD), Department of Homeland Security (DHS), and General Services Administration (GSA). 

Although there are stringent requirements for government cloud services, many of the cloud-based platforms currently approved by FedRAMP are also applications used for commercial data; with some providers offering cloud solutions specific to government. 


Make the Most of Your Investment in the Cloud with DSM!

Migrating to the cloud is a huge undertaking for many government agencies, especially for those with limited resources. That’s why DSM offers government agencies a fully customizable cloud journey that helps them select and utilize only the cloud services they need. As Florida’s preferred cloud provider, DSM can support your journey to the cloud with both bundled and customized services. Our hybrid cloud approach can incorporate your public and private cloud requirements, including CJIS compliance, DRaaS automation, and DPaaS replication.

To learn more about DSM’s cloud offerings for your government agency, contact our team today and tell us about your needs.

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