Microsoft's crusade to convert earth-bound customers into cloud floaters has landed an army of 30,000 government email and collaboration users in the US state of Minnesota.

The state will stop running its own Exchange email servers for executive-branch communications, and will switch to Business Productivity Online Suite (BPOS) for hosted Exchange email, SharePoint Collaboration, Live Meeting, and messaging with Office Communication Server.

Microsoft says Minnesota is the first US state to move to a large collaboration and communication suite in a private cloud environment.

The move should help Minnesota save money — the state faces a projected budget gap of $5.8bn.

Microsoft claims an immediate saving of $800,000 in moving to BPOS — presumably in software licenses, server hardware, and support. This will go towards an overall state goal of achieving $3m in cost savings.

Both Microsoft and Minnesota were gung-ho about the news. Minnesota stressed predicted savings and efficiencies from moving online.

Time will tell if this pans out. The supposedly always-on BPOS suffered outages recently, inconveniencing end uses who were unable to get their email. Microsoft apologized, saying the company had fallen short of its quality-of-service aspirations.

Interestingly, BPOS is being phased in through an "discovery" phase lasting three to eight weeks, with Minnesota working with Microsoft to prepare for the switch in every state executive-branch agency.

Microsoft needs to prove that its cloud strategy is working and winning. It has been on the hard sell for BPOS, actually paying partners for each Gmail inbox they rip out in return for installing hosted Exchange.

High-profile and large, flag-carrying accounts like Minnesota fit the bill of proving that Microsoft's services strategy is succeeding. Having a relationship with this existing Exchange customer no doubt helped the deal. It may even have facilitated talks, if Minnesota has started telling suppliers like Microsoft that it can't afford to continue paying them. ®