So far, the cloud has delivered, says Kingsberry. Using cloud services saved about $750,000 in the first year for Recovery.gov, a site for sharing data and information related to the federal American Recovery and Reinvestment Act of 2009. Kingsberry says he expects more savings in the future, since the site will be able to scale up without requiring investments in new hardware.

"Obviously, one of the key drivers behind the federal government [cloud initiative] is Vivek Kundra's [push] for cost-cutting," says JP Morgenthal, cloud evangelist at Smartronix, a Hollywood, Md.-based consultancy that helped the Recovery Accountability and Transparency Board move Recovery.gov to the cloud.

Big Bucks on the Line

The amount of money at stake is significant. In its "Federal Cloud Weather Report," released in April, MeriTalk, a social network for government IT professionals, found that cloud implementations could produce $14.4 billion in savings in the first year.

The report, which was underwritten by virtualization vendor VMware, also noted that 64% of 167 federal CIOs and IT managers surveyed in January expect cloud computing to both reduce costs and improve service.