New York City taps IBM for "cloud computing"

NEW YORK Sun Jan 30, 2011 9:00pm EST

NEW YORK Jan 30 (Reuters) - New York City has hired IBM (IBM.N) to consolidate the technology departments for more than 50 city agencies by using "cloud computing," the company said in a statement on Sunday.

New York City, which faces a deficit of as much as $4.4 billion, could save $100 million over five years by harnessing underutilized computing power with this method, IBM said.

IBM will be paid about $10 million for the first phase of the project, which it hopes will be an expanding program.

"By modernizing technology infrastructure, government organizations are able to speed the deployment of new technologies, reduce energy and operating costs, increase security, and better understand their data in order to expedite benefits tracking, root out waste, and provide transparency to the public on performance," IBM General Manager Bridget van Kralingen said. (Reporting by Joan Gralla; Editing by Marguerita Choy)

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