Microsoft officials revealed Thursday that the company is planning to develop a new dedicated multi-tenant, government community cloud computing environment.

The move is part of a broadening effort at Microsoft and its public sector division to meet emerging needs among federal agencies whose officials are trying to find faster, more economical and secure ways to migrate parts of their computing operations to the cloud.

That effort came into clearer view this week as public sector CIOs, including those education and health officials, convened at Microsoft’s Redmond, Wash., campus Wednesday and Thursday to share how their organizations are saving money and upgrading operations using cloud-enabled solutions, such as Microsoft’s Office 365 and its System Center 2012 platform.

Among them was Christopher Smith, CIO of the U.S. Department of Agriculture, who recently moved 120,000 department email accounts to a privately-managed cloud that meets International Traffic in Arms Regulation (ITAR) security standards. USDA now provides its employees a full complement of unified communications and other collaborative services, using Microsoft products, at a combined saving of $6 million annually, Smith said.

Until now, most agencies have balked at the idea of moving data and applications to multi-tenant environments, preferring the implied security of private, government-run cloud computing centers. But private cloud computing operations, designed to dispense infrastructure, software and other services on a pay-by-the-drink basis, have many of the same operating costs as traditional computing centers, without the associated savings derived when many tenants share those costs.

According to Curt Kolcun, vice president of Microsoft U.S. Public Sector (pictured), Microsoft currently offers its customers “the choice between Office 365 public or private cloud solutions hosted in a dedicated ITAR or multi-tenant environment.”

But in an interview during Microsoft’s Public Sector CIO Summit, Kolcun announced, and subsequently confirmed in a Microsoft blog post that, “We’re also committed to delivering a government community cloud for our US customers.”

Neither Kolcun or other Microsoft officials would provide details on where or when a government community cloud would come on line. However, Microsoft, which reportedly operates the world’s second largest network after the Defense Department, is currently building a new data center in Boydton, Va., 200 miles southwest of Washington, D.C. The new facility will feature Microsoft’s new modular data center design that could conceivably host, or be the model for, a dedicated government multi-tenant cloud computing environment.

Kolcun, and a host of other Microsoft colleagues, including Susie Adams, chief technology officer and Greg Myers, vice president for the Microsoft’s federal business, insist that agencies have a wide range of needs and that the best cloud computing solutions are those that preserve flexibility and interoperability.

“Despite what some of our competitors would have you believe, there isn’t a ‘one size fits all’ solution here,” Kolcun said. Moreover, he said, “Agencies will continue to operate IT infrastructures that include both cloud and on-premises assets.”

Microsoft’s strategy has shifted heavily toward the view that its products need to be able let users build and manage the information bridges to and from cloud based computing platforms. Windows Server remains the compute platform for on-premise computing that can add cloud capability and virtualization, which allows organizations to implement a private cloud, he said.

Microsoft Azure meanwhile provides platform-as-a-service capability in the cloud, such as the SQL Server database, business analytics and the ability to massively scale storage.

“We’re proud of the work we’ve done and are doing to ensure all Office 365 offerings support industry standards such as ISO 27001, SSAE 16, HIPAA and FISMA/FedRAMP,” said Kolcun, referring to various government security compliance standards.

“For those customers who prefer to build and manage their own private cloud infrastructures, we’ve empowered them to do so with tools like Windows Server with Hyper-V and System Center,” he said.

Kolcun, perhaps better than most executives working with public sector accounts, understands the appeal of private clouds to federal agencies, even if it means forgoing the savings inherent in large, multi-tenant clouds.

The reasons are many, but often come down to the ability its gives government IT leaders to upgrade needed capabilities more quickly, by working around traditional design, procurement and certification processes that can take years to complete with in-house systems. By buying computing as a service instead of building it as an asset, agencies also benefit from more frequent and more immediate software and security updates.

“We … keep hearing that private cloud isn’t really cloud,” said Kolcun. “Tell that to DISA (Defense Information Systems Agency), which manages a private cloud that is helping DoD organizations like the Army save incredible amounts of money on IT management costs while improving security and efficiency,” said Curt Kolcun.

Regardless of which way agencies turn–to private clouds or community clouds–security remains a key concern. That’s one area, however, where Microsoft may have a leg up, Kolcun insists, because of Microsoft’s Active Directory, and its ability to identify users, and the increasing ability for those users to move back and forth between cloud and on premise systems.