The money will be spent on two schemes managed by the Joint Information Systems Committee to improve the use of digital technology within higher education.
Cloud computing allows users to access a server or application remotely, meaning that universities will be able to share services rather than individual institutions each having to invest in the technology.
It is already a popular tool for managing student email systems, but universities have yet to make major savings from the technology for other IT needs.
£10 million will be spent on shared infrastructure to create virtual servers, storage and data management for universities. The project will include the creation of a “broker” for the procurement of shared services, which is open to both universities and their commercial suppliers.
A further £2.5 million will be spent on establishing cloud computing services for teaching, learning and research. This will include new technology to help manage research projects from before the allocation of funding through to completion.
David Sweeney, director of research, innovation and skills at Hefce, said: “At a time of pressure on university resources, it is critical that technology is used in a collaborative and cost-effective way, to deliver services that will benefit the sector.
“Cloud computing has the potential to do this in ways that will serve the academic community leading to improvements in research, teaching and administration.”