Few institutions in the UK could be more conservative than Her Majesty’s Revenue and Customs, so when the HMRC proudly declares it has signed a major cloud services contract, you know the world has changed.

That is what happened in the last week of September when HMRC used the government’s Cloudstore procurement channel to sign a centralised data storage contract with Skyscape.

There is a caveat, but this move is much more than a publicity exercise. It is admissions that even the most sensitive and security conscious government departments can make effective use of the cloud.

The caveat is simple: This contract is absolutely about private cloud. It is about data stored in HMRC’s local offices. There is no way that tax records are going to be flying around cyberspace in the UK, let alone being sent into the global ether.

It isn’t clear yet whether this is a glorified hosting contract or a true cloud deal based on multi-tenanted architecture, but it is likely to be the later because the economics won’t stack up otherwise.

That said, in another unprecedented move, HMRC is promising by the year’s end to publish the terms of the deal it has signed with Skyscape – in the name of transparency.

This is good news for everyone but the current established government IT suppliers. It will make competition keener and allow organisations, both public and private sector, to benchmark their service providers against a strong government department.

Until the terms of the deal are made public we’ll have to do with HMRC CIO Phil Pavitt’s statement that “This change will save over £1 million a year in running costs and will increase reliability and security of HMRC’s internal IT services.”

And there you have it. Used appropriately, the cloud can be more secure and cheaper than traditional IT. If IT leaders aren’t ramming this message home to the organisation you can rest assured that someone else will do – whether it is the CFO, the marketing director or a switched-on line of business manager.