Code named Fairfax, Microsoft’s government specific version of their Windows Azure Could service is now being tested with several agencies privately within the US government. Currently being hosted in Microsoft's data centers in Virginia and Iowa, home of the General Services Administration, the system is also currently being managed by U.S. personnel. Microsoft has also announced that they are working with private customers for the new service to which following the private previews the Microsoft Windows Azure Team plans to open up a "limited public preview" of the service. Read the full story here.
Microsoft has begun testing their private cloud for the government using their Windows Azure Cloud service, or more specifically, a variant of said solution geared for the U.S. government.