But government agencies are still ironing out ways to write new contracts that cover cloud computing, said Doug Bourgeois, director of the National Business Center at the U.S. Department of Interior. The National Business Center, focused on providing business services to other agencies, is looking at providing more cloud-computing services, but it needs vendors to be more flexible, he said.

"How can the private sector infrastructure providers provide me with a business model that's pay as you go?" he said. "My customers are only going to pay for what they can use. I need to purchase infrastructure and technology under the same model, so it's truly a shared-risk partnership."

In addition to the vendor issues, several government obstacles to cloud computing exist, the panelists said. U.S. government computing systems need to meet several regulations, including cybersecurity rules under the Federal Information Security Management Act (FISMA), Coleman said. Vendors say they can comply with those regulations, but contracts to cover those rules will be complicated, she said.

In addition, the federal budgeting process isn't geared toward purchasing computing power on an as-you-need-it basis, said Radha Sekar, assistant deputy undersecretary of the defense comptroller for financial management in the Department of Defense. Cloud-computing vendors need to educate lawmakers about the benefits, she said.

Using computing services on an hourly basis will require new kinds of contracts and new budgeting, Kemp added. "I'm not going to turn this thing off if I've already paid for it for the next three years," he said. "If I'm paying for it on an hourly basis, and I can save a lot of money by turning it off, or I can save the environment by turning it off, I'll turn it off."