Abstract. Electronic business uses ICT to support its activities. This has positively impacted business performance. Recognizing the successful implementation of ebusiness, governments have decided to use ICT in public services in order to improve the performance of government organizations in providing best possible information and services to citizens, businesses and other public departments. Computing technologies have grown by leaps and bounds, and governments of all nations plan to make optimum use of such advanced technologies across public service organizations. However, due to financial crises, governments have resorted to cost-cutting, which in turn has resulted in a cap on their ICT budget. As a largescale facility, e-government requires large monetary investment from the government. Some new inventions in the field of computing technologies have made cost reduction possible, while also increasing the efficiency and flexibility of government sectors. One such invention is cloud computing, which provides information and computing services as utilities. Cloud-based e-government provides the best possible services to its citizens and businesses at an affordable cost. This is because governments do not need to purchase and install ICT equipment on their premises. In this paper we analyse cloud computing and its applications in the context of e-government.