Blue Hill Data Services was on the ground this week at the NASCIO Annual Conference, held September 27–30 at the Hilton Bayfront in San Diego. The event is intentionally built around relationship building rather than a trade show floor, no demos, no booths to staff, just state CIOs, deputy CIOs, IT directors, and their industry partners in the same rooms for several days of sustained conversation. With 944 attendees this year, including forty-six state CIOs and representation from all fifty states, it remains the single best gathering anywhere to understand where state government technology is headed, not just where the vendor marketing says it is headed.
Here is what stood out across the sessions and the hallway conversations in between.
The Workforce and Budget Reality Haven’t Gone Away
Every year we expect this theme to fade, and every year it does not. An aging workforce of COBOL developers remains one of the top concerns we heard from state IT leaders, but increasingly, it is being framed less as a looming crisis and more as a genuine opportunity. The combination of retiring institutional knowledge and real advancements in modern development tooling is pushing agencies to finally move on modernization projects they’ve deferred for years, not out of panic, but because the economics and the tooling have both matured enough to make the business case.
Cost and flexibility remain the constant undercurrent beneath every budget conversation. State mainframe environments are not static: an agency count that was five on a given platform five years ago might be two or three today, and it will look different again in another five. The partners who earn long-term trust in this space are the ones who can adapt their service model as a state’s footprint shifts, rather than locking agencies into a fixed arrangement that made sense once and stopped making sense years ago.
Quantum computing has also quietly entered the planning conversation, even though it is not close to mainstream deployment. Alabama’s Supercomputer Initiative, still in its preliminary stages, is already being built on Z architecture, a small but meaningful signal that as this decade closes out, quantum will become a larger part of how states think about long-range technology strategy. Organizations with deep mainframe heritage have a real, structural advantage here: the platforms best positioned to integrate quantum capability are not being built from scratch, they are being extended from infrastructure that has already proven itself at scale.
Leadership Under Pressure
The conference opened with a keynote from Dr. Jessica Kriegel on leadership strategy, and it landed because it spoke directly to what State CIOs are navigating right now: delivering more with flat or shrinking budgets, retaining institutional knowledge before it walks out the door, and making long-horizon technology commitments inside short political cycles that don’t always reward patience. It is easy for technology conferences to treat leadership as a soft add-on to the “real” technical content. This year, it was treated as the main event, and the breakout sessions that followed backed that framing up.
Cloud Migration Hit a Wall, and That’s Reshaping Strategy
The most striking data point from the breakout sessions: despite years of sustained cloud migration investment, many states have only reduced their on-premises footprint by about 20 percent. That is a meaningful gap between the migration narrative of the last several years and the operational reality on the ground, and it is driving two clear, related trends.
First, states are turning to AI to analyze their existing environments in far more granular detail than manual assessment ever allowed, producing modernization strategies that target the specific applications and workloads worth moving, rather than pursuing broad, one-size-fits-all migration mandates that treat every system as equally movable.
Second, and more notably, a real wave of cloud repatriation is underway. Certain critical applications are moving back to legacy systems, not as a retreat, but as a correction: an acknowledgment that some workloads perform more reliably, more securely, or more cost-effectively on the platforms built to run them in the first place. This is exactly the pattern we see with our own clients at Blue Hill: the goal was never “cloud everything” or “mainframe everything.” It matches the workload to the platform that serves it best and has the operational flexibility to make that call in direction as circumstances change.
AI Is Expanding the CIO’s Job Description
The “Emerging Technologies” breakout session pushed this theme further. AI is accelerating both new application development and legacy modernization work simultaneously, no longer treated as separate initiatives competing for the same scarce engineering time. Discussion also turned to the growing presence of “machine customers,” automated systems increasingly interacting directly with government services and infrastructure without a human in the loop, and what that means for how agencies design and secure those systems going forward.
The clearest signal from this session: the CIO role itself is expanding past traditional IT infrastructure management well. State technology leaders are now expected to be fluent in AI governance, quantum computing strategy, and robotics policy, in addition to the budget, security, and workforce responsibilities that already defined the job. That is a significant scope expansion for a role that, in many states, has not seen a proportional expansion in staff or budget to match it.
Our Takeaway
The throughline across every session we attended was not “get off the mainframe” or “move everything to the cloud.” It was something more honest, and frankly more useful: know exactly where your current platform still outperforms the alternative and build your strategy around that reality instead of around assumptions, vendor pressure, or last decade’s conventional wisdom.
That is the conversation Blue Hill Data Services has with clients every day, whether the topic is modernization, disaster recovery, compliance, or simply finding the people who can still support the systems a state depends on. As workforce gaps widen and the scope of the CIO role keeps expanding, that kind of steady, adaptable partnership matters more than ever.
Thank you to everyone who stopped by to talk mainframe, hosting, and workforce planning with us in San Diego this week. If any of these themes are shaping your agency’s roadmap, we would welcome the conversation.
Learn more about how Blue Hill supports government IT environments: https://www.bluehilldata.com/why-blue-hill/
