Government cloud computing proponents claimed a victory yesterday with the news that all 17,000 General Services Administration employees had successfully migrated to a cloud computing-based email system.

The $6.7 million project, begun last December and officially completed this week, converted GSA’s employees from an aging IBM Lotus Notes software platform to a new Collaborative Office Solutions version of Google Apps for Government, a cloud-based software platform that among other features, gives employees access to their email on virtually any approved device.

The new email system represents an important milestone for the federal government: GSA is the first of 15 agencies expected to move some 950,000 email boxes across roughly 100 email systems to the cloud, in a broader effort to reduce agency operating costs.

“Our own transition to the cloud will save millions in taxpayer dollars annually,” said GSA Administrator Martha Johnson in a GSA blog post yesterday. The new system is expected to reduce operation costs “by 50% over the next five years and save more than $15.2 million for the agency in that time,” Johnson said.

While federal executives are coming around to the idea that computing in the cloud can be a more cost effective business model, many remain skeptical about the real savings over the short term.

Despite an outpouring of support from industry, including yesterday’s release of recommendations by a TechAmerica Foundation commission, and an IT reform push from the White House, concerns about budget-cutting and sunk investment costs in existing computer systems continue to deter many agency executives.

GSA’s milestone move to the cloud confirmed two things: One, that a project of that scale can be done; and two, that it still requires some heavy lifting.

During the six-month transition, more than 17,000 GSA and contractor email addresses, content and calendar data–about 10 terabytes of data in total–were migrated to Google Apps for Government, according to Peter Gallagher, partner, civilian agencies for Unisys Federal Systems, the lead contractor involved in the migration. Google, Tempus Nova and Acumen Solutions partnered on the project. Altogether, contractors estimate about 60 terabytes of data, or the equivalent of about 30 billion typewritten pages, will ultimately be transferred.

Most GSA users were limited to having only 60 days of email on the servers, said Gallagher. The rest typically was stored by users in local archives on their personal computers. GSA is now in the process of allowing users to move archived email from their PC to the Google cloud.

Google’s limit of 25 gigabytes per user, however, represents a huge increase in storage capacity for users. Google email attachments are limited to 25 megabytes in size, although larger files can be stored in Google Docs and Google Sites, which are part of the Google Apps for Government environment.

Additionally, all mobile devices used by GSA employees, including some 9,300 BlackBerry accounts, operating on 14 BlackBerry Enterprise Servers, had to be transitioned to work on the new platform, according to GSA documents.

Making the new system secure enough to meet federal standards was another big part of the project.

Unisys engineers helped GSA install a new two-factor authentication engine to make remote access easier and more secure. That and other measures, including extensive compliance work on Google’s end, helped the new GSA email system receive Federal Information Security Management Act (FISMA) authorization. That certification was only important not only for GSA, but also for Google Apps for Government, in being able to support GSA’s move to the cloud-based system.

Then there was a significant investment in training and communication. GSA relied heavily on a self-serve “User Experience Portal” that was updated with videos and other resources to address specific issues faced by GSA users of the new system.