The Higher Education Funding Council of England announced today that it set aside £12.5 million for a broad cloud computing-geared shared services initiative for England’s university system. This effort is set to go far beyond simple email and student services (which are the usual targets of university cloud implementations) as it works to create a network of cross-college shared services.

The bulk of the resources (around £10 million) will go toward the construction of shared storage and data management services, with significant effort and funding going toward creating the basic cloud infrastructure needed support the diverse user base.

The remaining funding (in the area of approximately £2.5 million) will be focused on the creation and licensing for a wide array of applications used in higher education.

Recall that this investment is hinging on the idea of “shared” services across a university system—not within the confines of a single campus or one-campus network. Shared storage, shared computational resources—and many, many needs to support, including those of researchers, students, faculty and beyond.

While on the surface, this might sound like the dawn of a innovation-led push to enhance and extend university infrastructure, the switch to the cloud IT model came about due to massive budget cuts that are set to affect research, buildings and instruction as well as technology.

David Sweeny, Director of Research, Innovation and Skills at the England’s Higher Education Funding Council noted that during times of economic pressure, “it is critical that technology is used in a collaborative and cost-effective way to deliver services…cloud computing has the potential to do this in ways that will serve the academic community.”

Some might contend, however, that this is not the best way to serve the community of users with a vast range of needs for computational resources. Even though such an effort might help solve some cost issues, as Peter Tinson, executive secretary of the Universities and College Information Systems Association argued there are some problems with a shared services model across universities. Tinson stated,  “there is a degree of a cultural resistance towards shared services among universities…there’s a fear of loss of control.”

In an article for EDUCause Weekly Shelton Waggener, Associate Vice Chancellor and CIO at the University of California, Berkeley proposed that shared services for university systems are a positive move, despite concerns about losing control over one’s infrastructure. He stated, ““Providing a single approach to IT solutions is very difficult given the diverse constituencies of a higher education campus. Discussions about solving the economy of scale issue frequently leads to complaints about the dreaded ‘centralization’ of IT services and the perceived loss of features of features and autonomy.”

Waggener continued that the time has come to “move away from the siloed, local delivery model” and that universities should consider reorganizing around the idea of IT supply and demand. “Rather than centralized versus decentralized, the real discussion for higher education IT needs to be about demand planning and service delivery and where those two activities most appropriately belong to achieve maximum benefit at both the institutional and local levels.”

As universities see funding cuts scrape away at their IT resources, the dueling issues of cultural/loss of control versus cost savings in the face of increasing demand for IT services will create an interesting dynamic. As the cloud becomes a more commonplace, trusted way to handle needs on a university or university system-wide scale, new ways to manage demand, priority, access and concerns about (de)centralization must be developed.