Sunderland City Council is building a new cloud computing environment that will not only be used by the council itself but also, it claims, support the local economy by offering IT services to local businesses.

IBM has been contracted to plan, design, provision and implement the new infrastructure, which will be hosted in the council’s data centre, and which will incorporate some of its existing hardware and software.

According to IBM, which is providing the network, storage and server hardware, the new cloud will let businesses expand their IT capabilities "without investing in infrastructure, training or licenses". IBM claims the new platform will reduce operational costs by £1.4 million every year for the next five years through reduced "hardware, software, maintenance and improved IT management".

Initially, the infrastructure will be used to support 4,000 end-users at the council. But "[b]usinesses will benefit through the ability to increase capacity and capabilities without investing in new infrastructure, training new personnel or licensing new software," IBM said in a statement. "Other companies, agencies and public sector partners are also expected to use the Cloud for improved collaboration.

Sunderland City Council recently announced that it would be the first city in the UK to provide city-wide ‘superfast’ broadband, with a maximum download speed of 300mbps promised by summer 2012. This is more than 40 times the UK average.

"Sunderland is committed to regenerating and securing its future economic prosperity," said Paul Watson, leader of Sunderland City Council. "The city council is investing in Sunderland’s infrastructure, ensuring the city is the easiest place in the UK to do business – whether you’re a small to medium-size enterprise, or an international manufacturing giant."