HM Revenue & Customs (HMRC) will be the first government department to deploy G-Cloud services over the Public Services Network (PSN).
It has signed a contract with Skyscape for centralised data storage, which HMRC claims will provide cheaper, more secure and greener storage for the department.
Both the G-Cloud and the PSN are core to the government's ICT strategy.
The government launched its CloudStore in February, which saw 257 suppliers signed up to the G-Cloud framework and catalogued within an online portal. It is hoped that by providing a tool that allows government departments to easily search for and buy cloud products from suppliers, and which also provides quality and price comparisons, government will be able to move away from large costly contracts and open up procurement to more SMEs.
The PSN, on the other hand, is a network of networks, which has been established to improve government communication links and cut costs.
PSN providers will connect to Direct Network Service Providers (DNSPs) via the Government Conveyance Network (GCN). The GCN is, in effect, the backbone to the PSN, acting as the gateway between the networks of different service providers.
"This change will save over £1 million a year in running costs and will increase reliability and security of HMRC's internal IT services," said HMRC's Chief Information Officer, Phil Pavitt.
He added: "The Skyscape contract is a major step for HMRC in moving away from traditional ways of working with large service providers. And it's a great example of how we're exploring smarter, more innovative solutions that make life simpler for us and help us provide a better deal for our customers."
HMRC will begin moving data currently stored in local offices to the cloud storage between Autumn 2012 and Spring 2013.
This is the second contract win for Skyscape through the G-Cloud that has been revealed this week, where Government Digital Service has penned a deal with the company to provide infrastructure-as-a-service to host the much anticipated GOV.UK website.