There’s no doubt about it – we’re addicted to data.  We use, generate, store, move, and manage, many times the volume of data than even the most future-focused data visionary could have imagined just 15 years ago.  Both the volume and types of new data have increased dramatically with sources like video management and machine data stressing current IT systems.  And, data retention periods for legal and compliance reasons are growing from months or years to decades.

On the one hand this data-intensive world presents huge opportunities for state and local governments to deliver more services to citizens and improve the quality of life. However, as with all things, there’s a cost associated with innovation and this type of data-driven change.

As state and local governments acquire, generate, and use more data there’s the potential for data management costs to balloon at a time when most are facing tight budgets and the possibility of even more reductions. Despite the benefits that data analytics projects could provide, including cost savings through improved revenue collection, decision support, service alignment, and resource usage, it’s possible that upfront costs will delay, and possibly derail, the acquisition of much-needed data management tools.

Before we succumb to the gloom of fiscal prudence and put data-driven projects on-hold while we see if we can survive with legacy systems, there are more factors to consider.  It’s vital to remember that just as how we generate and use data is changing, there are new solutions coming to market that address the data management cost challenges being created.

Moving data out of the data center and into the cloud has been one of the most significant changes for state and local governments, which can empower data sharing between organizations and help manage infrastructure and operational costs, to name but two obvious benefits.  And now, we’re seeing the emergence of the next-generation of data management approaches that will continue to empower state and local governments as they pursue data-driven projects like Smart Cities and open government initiatives.

To my way of thinking the most important of these developments is the emergence of the pay-as-you-go data management model, both in the Cloud and on-premise.  While all government organizations have data management needs, those needs fluctuate– both at a baseline and in daily usage – based on what projects are being delivered and what citizen need is being met.

Rather than locking CIOs into contracts that over-service their teams’ needs, or penalize them for needing more capacity on occasion, the pay-as-you-go model creates data management solutions that are tailored to customers’ needs more precisely.  Using a data-driven model that looks at performance and capacity together it’s possible to identify, manage, and deliver a scalable solution.  With this model, CIOs can easily scale up to augment the base amount of storage provided on day one with additional buffer capacity to handle usage spikes and future growth. There are no wasted resources, since users only pay for services procured.  This kind of model has been used occasionally in the last few years, but the strong majority of data infrastructure needs are still being met via standard capital purchases.  Now, with recent developments that make these models more flexible, pay-as-you-go is becoming increasingly popular to greatly reduce up-front capital costs and then only pay for what is needed going forward.

This can mean a dramatic change in budgeting and payment processes and, frankly, in thinking for an IT leader used to fixed costs in a fixed data center.  But, for state and local government CIOs to thrive in a data-driven world innovative thinking is the key.  Upending the way things have always been done, including upending the way data management payment models have been structured, is the type of creative endeavor that will pave the way to success.