Azure VMware Solution helps the State of Alaska migrate 1,100+ apps in 21 months

When Alaska Governor Mike Dunleavy delivered his State of the State address in January 2026, he pointed to cloud modernization as a cornerstone of the state’s digital transformation. In less than two years, the state had migrated more than 1,100 applications to Microsoft Azure, accelerating access to digital services for residents across the state.

Niel Smith, Deputy CIO at the State of Alaska's Office of Information Technology, helped lead that transformation. After more than six years of modernization work, the state is now being looked to as a model by peers across the United States. At national gatherings of state technology leaders, he hears the same refrain: Alaska did it, so we should be able to do it.

"If I can tell them a story that puts a vision of possibility in their minds, I've solved over half the problem," Smith says.

A foundation for what comes next

That vision has been taking shape across Alaska. The transformation is now delivering measurable impact across the state, including expanded digital access for residents, improved operational efficiency for agencies, and stronger security across state systems.

The myAlaska mobile app is a single, AI-navigable gateway to more than 100 state applications and services. Residents can ask the app how to renew a license or find a form, and it takes them there, powered by an Azure AI Foundry directory tool that indexes included state services in one place.

The Permanent Fund Dividend system, which distributes annual payments to every Alaskan resident, is being rebuilt in Azure as a cloud-native service with AI capabilities. The old system had been too technically constrained to migrate for years. It's now targeted to go live in 2026.

Approximately 15,000 state employees now have access to responsible and protected Microsoft 365 Copilot and Copilot Chat AI tools. When the governor issued administrative orders directing agencies to find operational efficiencies using AI, Alaska was ready to respond immediately. Departments are piloting agentic AI solutions to streamline permitting and state services. The Department of Environmental Conservation is testing an Azure AI Foundry tool to process millions of air and water quality documents.

"Can you imagine if state applications were still on premises and the governor said, 'Use AI tools to make your services more efficient'?" Smith says. "We'd be two or three steps away from the solution. There's no chance of responding in any timely manner."

Reaching this point required overcoming significant technical and organizational barriers.

The road to the cloud

Alaska had been trying to get to Azure for years. Leadership knew the destination, but every direct migration effort seemed to stall. Traditional migration approaches required extensive reconfiguration and coordination across already constrained IT teams, slowing progress and increasing risk. Moving workloads the conventional way meant changing IP addresses, reworking configurations, and pulling in application teams already dealing with vacancies, code freezes, and competing priorities. Projects that looked manageable on paper stretched into months or stopped altogether.

Technical complexity was only part of the challenge. As Smith saw it, some teams faced legitimate technical constraints, while others were hesitant to take on the risk and effort of large-scale migration.

Meanwhile, the infrastructure Alaska was trying to leave behind continued to show its age. In one Juneau server room, staff placed blue tarps over racks to protect equipment from water leaks. During budget debates in 2020, the state's CIO brought a photo of the scene to the legislature as a case for modernization.

"We're trying to get out of the business of putting blue tarps over our racks," Smith recalls.

The need for change had become clear. But actual progress required a different approach.

Accelerating migration with Azure VMware Solution

Azure VMware Solution (AVS) enabled Alaska to accelerate its migration strategy. With AVS, Alaska could move workloads to Azure without immediate rearchitecture, IP address changes, or downtime.

Smith remembers watching a live cutover of a web server and SQL server from his desk. It dropped one packet and kept going. The systems were seamlessly migrated to Azure infrastructure over a thousand miles away and the people using them had no idea it had happened.

Just as important, AVS removed one of the biggest barriers to progress: hesitation from teams worried that migration would break their applications or consume scarce time. Once workloads moved successfully, skepticism often gave way to curiosity.

"Once they got there, they said, 'Oh, this isn't that bad,'" Smith says. "Now we want to go cloud native."

"AVS was the difference between success and non-success for us," he says. "It was the magic sauce to get us rapidly to the cloud, and I still don't know of any other or better way to do that."

Built for the future

Smith describes Alaska's broader strategy as being "one step away from the solution."

When the state moved workloads to Azure between 2021 and 2023, no one could have predicted how quickly AI tools would mature, cyber threats would evolve, or agencies would be asked to deliver more with less. But because Alaska's applications and data were already in Azure, the state was able to respond quickly to new priorities, including AI adoption, evolving security needs, budget pressures to operate more efficiently and increased service demand.

That readiness mattered in practical ways. State services had long depended on fragile physical infrastructure, including a single undersea fiber connection that fishing crews occasionally snagged with their anchors, which could previously disrupt access to statewide services. When a volcano near Anchorage threatened to erupt last year, departments with cloud-hosted services had nothing to plan around. Their Azure servers were fine.

The move also surfaced benefits Alaska had not fully anticipated. In assessing every server across the state government, the team identified over 1,000 servers that were running but no longer needed. Alaska retired them all, reducing licensing, patching, and support costs at scale. This also reduced the state’s operational footprint and improved overall resource efficiency. The cloud also gave the state flexibility that on-premises infrastructure rarely could: Instead of buying hardware for peak demand and living with it for years, teams could adjust resources over time as workloads changed.

When Governor Dunleavy leaves office, the cloud platform, AI tools, and the momentum for modernization will remain. For Smith, playing an integral role in the adoption efforts may be the most important gift he could give back to the state where he was born.

The State of Alaska did more than migrate workloads. It showed that even one of the nation's most remote and logistically complex state governments could act quickly, modernize at scale, and build for what comes next.

"It's hard to argue with results," Smith says.