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Two good Australian CIO interviews

Renai LeMay — Wed, 16 May 2012 03:45:14 +0000

blog There have been a couple of good interviews with Australian chief information officers done by various media outlets over the past couple of days — good enough that we thought them worth highlighting to readers on Delimiter.

At iTNews (click here for the full article), Ry Crozier (who we consider one of the best and most straight-up enterprise IT journalists in Australia) goes through the Queensland Department of Transport and Main Roads three-year integration of two previous departments. A representative paragraph:

The department’s Information Division – internally known as iDivision – is a “hybrid” of the two former departmental ICT teams, according to [ chief information officer Chris Fechner]. “We didn’t try and subvert one or the other,” he says.

Over at ZDNet.com.au (click here for the full article), there’s a solid yarn by Luke Hopewell, focusing on Allianz chief information officer Steve Coles, who was at a CSC event this week talking about re-using technology. A sample paragraph:

“I hate the term ‘legacy’ technology,” [Coles said.] “Legacy means [a system has] got to be replaced, and we’ve got to get a shiny new one. For us, it’s been a key part of our strategy to reuse and simplify rather than rip and replace.”

What did we like about both interviews? They both went deep, and they both went into what we call “high” enterprise IT. In other words, not just surface-level questions such as desktop operating system upgrades or “how do you use iPads in the enterprise”, but into questions of enterprise IT architecture and technology strategy. Some very interesting themes came out of both. Kudos!

Offshore cloud an adoption barrier, finds KPMG

Renai LeMay — Tue, 01 May 2012 06:29:56 +0000

news A research study partially funded by major offshore cloud computing vendors Salesforce.com, Microsoft, and Google has found that one of the major barriers stopping Australian organisations from migrating to cloud computing platforms is the lack of cloud infrastructure based in Australia, with legislation such as the US Patriot Act cited as key concerns with offshore hosting.

The study, entitled Modelling the Economic Impact of Cloud Computing, was launched by consulting firm KPMG in Sydney this morning, at a launch attended by Communications Minister Stephen Conroy and other senior figures in Australia’s technology sector. You can download the full report in PDF format here.

In general, it found that, should Australian organisations adopt cloud platforms over the next few years, as the experience of “more mature markets” such as the US suggest is likely, then the benefits for both enterprises and the economy as a whole could be “substantial:, lowing ICT operating and capital expenditures significantly, while still boosting overall gross domestic product by a figure of around $3.32 billion per year. However, ultimately KPMG concluded that the Australian cloud computing market was still “at the early stages of adoption”, particularly in comparison to the US and Europe.

The report was commissioned by industry lobby group the Australian Information Industry Association, in coalition with Conroy’s Department and Salesforce.com, and with the support of other vendors such as Microsoft, IBM, Optus, Fujitsu, Google, CSC, Hitachi, IPscale and Macquarie Telecom, all of whom have some skin in the cloud computing game. In its report, KPMG noted that many executives it contacted while conducting research on attitudes towards the cloud “believed that the Australian ICT market does not yet have mature offerings in cloud-deployed solutions”, with some therefore declining to participate in the study.

Additionally, in the “barriers to uptake” section of its report, KPMG noted that issues included the “location of data and related security and data sovereignty issues (including implications of the US Patriot Act)”. A 2009 survey, KPMG noted, had found that although cloud computing made it possible to access services located anywhere in the world, “there is a strong desire for services located within Australia’s borders”. Other issues also included the issue of latency when accessing cloud computing services; which would especially be an issue for services located offshore.

The comments represent something of an irony for companies like Microsoft, Salesforce.com and Google. All three have repeatedly declined over the past half-decade to invest in dedicated cloud computing infrastructure in Australia, as has rival company Amazon.com. In part because of this issue, Salesforce.com and Google have particularly struggled to make headway in Australia’s public sector, which has expressed a particularly strong interest in on-shore facilities, due to regulatory concerns associated with storing information in the US.

Microsoft is known to provide local services from Singapore, and Salesforce.com from Japan, but many Australian organisations have still continually expressed doubts about storing data even in such jurisdictions, which are not known to have the same laws allowing government access to corporate information.

At the event this morning, Conroy reportedly (click here for iTNews’ article on the subject) outlined plans to visit Google’s US headquarters, in an attempt to promote Australia as a potential cloud computing hub, especially associated with the rollout of Labor’s National Broadband Network project over the next decade.

However, the Senator’s lobbying may fall on death ears. Google has over the past several years continually refused to commit to constructing Australian datacentre infrastructure. In February 2010 the company acknowledged “intense interest” from local customers in Australia-based application hosting, but said it would be hard to say that local infrastructure would be “the right path”.
Some of the companies supporting the KPMG study, however — such as Fujitsu, CSC, Macquarie Telecom and Optus — do have Australian infrastructure, and have won significant customer contracts to use that infrastructure over the past several years, with companies as large as top-tier bank Westpac getting involved.

opinion/analysis
Another vendor-supported report produced by a consulting firm, broadly concluding that Australian organisations should adopt new technologies. We’ve seen this a billion times before. So what’s new? Interestingly, quite a lot.

Firstly, let’s be under no illusions. As anyone with any industry experience would expect, KPMG’s report attempts to paint a rosy future for cloud computing in Australia, no doubt with the intention of at least paying lip service to the interests of its corporate sponsors. Although these kinds of reports are, on paper, “independent” — as in, the AIIA and the other sponsors technically can’t pay KPMG to conclude any in particular, there’s always a fine line, and KPMG obviously knows who’s funding its research (and potential future consulting engagements).

But reading between the lines, it’s clear that KPMG has at least done an honest job here. Reading the report, one can’t help but conclude that cloud computing vendors are finding it tough in Australia just now. The hype has died down, early adopters are losing their enthusiasm for the various platforms around, and the whole industry is clearly in what Gartner would call “the trough of disillusionment”.

This, again, is no real surprise. Many within the industry have been aware of this for a while.

But what is interesting is the extent to which a great divide is emerging between the various cloud players. On the one side of the line are companies like CSC, Fujitsu, Optus, Macquarie Telecom and so on, which are implementing on-shore cloud computing solutions and winning early success. Much of what these companies are doing isn’t really technically “cloud computing”, or at least not the “public cloud” that so many people associate with true cloud computing. It tends to be things like “private cloud”, which gives customers much more control over their infrastructure.

On the other side of the line are companies like Salesforce.com, Google, Amazon and Microsoft (although Microsoft has a foot in both camps — public cloud with Azure and private through partnerships with companies like CSC and Fujitsu). These companies are struggling to win public cloud customers in Australia, due to their nature as offshore hosters. As KPMG notes in the report: “Firms are more likely to be using private than public cloud at this point.”

None of this is really a surprise. Companies which invest in Australia, meet the demands of local customers and don’t stick to hardball philosophies which mandate only public cloud and nothing else (I’m thinking here of Salesforce.com’s antiquated concept that software is dead, or Google’s refusal to acknowledge that the idea of private cloud has any merit). But it is interesting to see it spelled out this way, in a report, ironically, sponsored by both sides of the coin.

Image credit: Krystle Fleming, royalty free

Suncorp picks Oracle to replace core

Renai LeMay — Thu, 26 Jan 2012 23:29:30 +0000

news Tier two banking and insurance giant Suncorp has picked Oracle’s next-generation banking platform to replace its ageing Hogan core banking system, as the momentum around core banking replacement projects accelerates in Australia.

In March 2010 Suncorp chief information officer Jeff Smith (pictured, right) acknowledged the bank was investigating the case for replacing its core, although at the time the CIO noted he believed there was still life in the legacy infrastructure. He said Hogan operated “quite well”, but the software’s owner CSC hadn’t upgraded it in a long time: “We are taking a look at that now, saying: ‘Do we want to go and do something bigger?’”

Yesterday The Age published an interview with Smith confirming Oracle had been selected and the project would go ahead. “The big priority is around simplification … this year it’s going to be simplifying our banking system,” Smith reportedly said.

Further details have also been published on the LinkedIn profile of Mark Smith, an infrastructure architect at Suncorp, who appears to be seconded from Oracle to work at the bank and assist with the project.

According to Smith’s profile, Suncorp has badged its core banking replacement project as the ‘Banking Platform Program’ (BPP). “BPP is the complete replacement of the banks core banking software with the new Flexcube product called Next Generation Platform (NGP),” Smith’s profile states. “Additional to the Flexcube product, they will be deploying the following Oracle prodicts: Golden Gate, Active Data Guard, ODI, OBIEE, WebCenter, SOA Suite, OSB, OEM, E-Business Suite, IDM Suite, BPA Suite.”

The decision represents a loss for CSC, whose Hogan software appears to be gradually losing ground in Australia to the likes of Oracle, and also SAP, who was in the running for the Suncorp deployment but lost out, despite having been used in a successful core banking deployment at the Commonwealth Bank of Australia.

Core banking platforms sit at the heart of any bank and constitute the base on which the bank’s technology platform is built – for example, modern applications such internet banking systems commonly sit on top. However, many of Australia’s banks have core banking platforms that have been in place for decades – often built on mainframe technology – and are becoming increasingly unwieldy and difficult to maintain.

Other banks such as the Commonwealth Bank of Australia have already instituted major programs to replace their core, but they can be pricey – CBA’s SAP- and Accenture-led overhaul has a budget of $1.1 billion. CBA chief information officer Michael Harte has hailed the new technology’s ability to provide ‘real-time banking’ – without the need to run batch processing jobs.

National Australia Bank has also put its foot in the water on its own core revamp based on Oracle, but others such as Australia and New Zealand Banking Group and Westpac appear to be holding off for now to focus on other projects.

In 2010, Smith said that Suncorp had been able to cut the cycle time down eighty percent to build a new service on its existing Hogan platform. The CIO noted opening accounts and conducting transactions between systems in the bank’s branch and automatic teller machine networks took place in real time even with Suncorp’s current platform. One of the main motivators to migrate to a new platform, he said, was the availability of talent to maintain it.

“We all have to be cognizant that the average age of Hogan developers is in the fifties now,” Smith said. “That is a bigger issue for me, because we want to keep people enthused and keep them engaged, but you are running into retirement years, and I think that is a bigger issue than the technology side. I think the big advantage of the new platforms is the ability to be able to do more with them because you have a bigger supply base of individuals and technology that you can use.”

In mid-2011, Suncorp also revealed plans to invest some $9 million in a new customer relationship management system from Oracle. The value of the new core banking platform has not yet been revealed.

opinion/analysis
I’m not surprised by the fact that Suncorp has chosen to take the plunge with a new core banking platform. Smith is a very forward-thinking CIO and has long appeared to have the complete support of Suncorp’s upper management and board when it comes to major new technology deployments. He’s one of the only CIOs in Australia’s current banking sector who enjoys that level of support — with the other one being CommBank’s Michael Harte.

Suncorp had already knocked so many systems upgrades off its ‘To Do’ list over the past half-decade. It makes complete sense for the bank to go after its core at this time.

A successful Suncorp deployment of Oracle’s platform will ratchet up the pressure on the other major banks yet to initiate a core replacement strategy — Westpac and ANZ — to get into the game. NAB is also deploying Oracle’s system, but very little is publicly known about how it’s going. From the little that the bank has said on the matter after it conducted some early test rollouts a while back, I have no doubt that it’s going slowly.

CommBank’s core deployment has given it a real advantage in the marketplace. If you sign up for accounts with the major banks (most of which I have) to test their customer-facing systems out, it quickly becomes apparent that there is just so much *more* you can do with CommBank’s systems — and so much faster.

New accounts are created virtually instantly, money is transferred around faster, and there’s a stack of little features which its online systems let you do — such as changing your PIN number online. If you haven’t played around with CommBank’s new online platforms, I recommend you do so. And that’s just the most obvious indicator of the deep underlying structural change the bank’s successful core revamp has wreaked on its systems. Now Suncorp’s going in the same direction.

Image credits: Delimiter, Suncorp

Does Australia need a cloud computing visionary?

Renai LeMay — Fri, 11 Nov 2011 02:05:16 +0000

blog On the blog of local cloud computing startup Ninefold, the company’s managing director Peter James raises an interesting question — does Australia need a cloud computing visionary to really push the nation’s cloud computing journey forward?

In the US, James points out, the Federal Government’s whole of government chief information officer, Vivek Kundra, drove a ‘cloud first’ policy which significantly changed the way the country thinks about cloud adoption. Kundra has resigned now, of course, but the effects of his vision continue to be felt, with the UK Government now following. Writes James:

“With the US and now UK examples, surely its time to call in the cavalry and have Australian governments follow this lead. Without federal, state, territory and local governments playing a leading role there is a real risk that the innovations and investments made by Australian ICT companies will not be enough to prevent Australian cloud from lagging further behind. Cloud computing adoption in this country is calling out for some real leadership. Where is our own Vivek Kundra going to come from?”

From my perspective, we do have a couple of high-profile IT executives in Australia who have been pushing the cloud message strongly. Commonwealth Bank chief information officer Michael Harte is probably the most prominent of those, but Westpac’s Bob McKinnon has also been making the case for cloud.

And although his company Altium is a much smaller player, fellow CIO Alan Perkins has also been extremely vocal about the cloud in Australia, both through his prolific writing on the topic, as well as speaking in public and demonstrating how cloud computing and software as a service can be used in the enterprise.

I would argue that other thought leaders would include CSC Australia chief technology & innovation officer Bob Hayward and Fujitsu chief technology officer and executive general manager of marketing Craig Baty. Both obviously have a barrow to push from the vendor side, but they also both have extensive past histories in the analyst community. I have found their cloud knowledge and awareness of the Australian marketplace to be second to none.

Do we need a more concerted effort from CIOs, vendors, government figures and so on on the cloud? Do we need Australia’s own Federal Government CIO, Ann Steward, to make some sort of dramatic ‘Cloud First’ statement? Personally, I’m not sure.

I think much of what James is talking about with respect to the cloud in Australia refers to the cloud at “The Peak of Inflated Expectations” on Gartner’s hype cycle. Cloud First sounds great in practice … but like any artificial imposition on technology projects, it’s not something that will be held to in practice — and if it is, it has the potential to be harmful.

Do you go “outsourcing first”, “on-premises first” or “open source first”? No. For each technology implementation, you look at the best option overall to suit your needs. You don’t arbitrarily pick a technology — you pick a solution. I’m not sure whether cloud is still at that obnoxious hype cycle peak in the US. But in Australia, cloud computing has definitely entered at least Gartner’s Trough of Disillusionment state, and it’s possibly heading back up to the Slope of Enlightenment and Plateau of Productivity where the best long-term outcomes can be found.

In this light, in my opinion, Australia probably doesn’t need the sort of cloud computing visionary which James is discussing — cloud computing adoption in Australia will probably get there more pragmatically from now on, without this kind of leadership. I’m sure James, as the leader of Ninefold, would like everyone in Australia to sign up to the cloud hype as much as possible. But I think he is destined to be disappointed ;)

Image credit: Fred Fokkelman, royalty free

Kwan after the storm: Immigration’s new CIO charts a fresh path

Renai LeMay — Tue, 27 Sep 2011 05:43:35 +0000

profile When Australia’s technology industry thinks about the Federal Department of Immigration and Citizenship, it is overwhelmingly one project which comes to mind. A giant, lumbering mammoth of an initiative; a gargantuan behemoth which spanned half a decade, involved hundreds of staff, and soaked up many hundreds of millions of dollars in investment.

That behemoth named Systems for People.

The project was first approved in the 2006 Budget as a mammoth technology overhaul of DIAC’s IT systems, following the damning Palmer and Comrie reports — especially stemming from the unlawful detention of Cornelia Rau. The project was initially valued at $495 million but attracted several budget increases. Much of that funding went to companies like IBM, Oracle and CSC, who worked at the core of the overhaul, predominantly focused on immigration records, but slabs also went to pay a small army of staff employed by DIAC itself.

As the project wore on over the succeeding half-decade since its genesis, it would vault the public servant responsible for it into the public limelight, as similar massive IT overhauls at the Australian Taxation Office, the Australian Customs and Border Protection Service and even the Commonwealth Bank had done before it.

For five years, DIAC chief information officer Bob Correll shepherded Systems for People through its development cycle. The appointment of suppliers. Struggling to contain wage costs. The six monthly status updates with the press. And more. On and on Systems for People lumbered, like a gargantuan elephant pulling a fully-laden cart towards a Byzantine city.

But now that storm has passed over DIAC, and with its passing has gone Correll, who retired from his role in April this year. In his place was appointed a new executive, Tony Kwan (pictured, below).

Little is publicly known about Kwan. His LinkedIn profile only goes back to May this year, when he took up the DIAC role. His biography was never issued by Immigration, upon his appointment and his name does not appear in Google more than a handful of times.

But what we do know about Kwan appears to show a somewhat open and innovative character. His previous known role saw him leading the IT operation of the former Department of Education, Science and Training as its chief information officer. In 2004, in that role, Computerworld quoted Kwan in the context of Linux desktop deployments as stating that his-then department had done a lot of work looking at open source technologies — currently a major focus of the Federal Government.

“The Learning Federation has set up an open architectural framework to promote learning objects to try to maximise investments in developing learning material that’s open and re-useable,” Kwan said at the time. “We are also looking at promoting the use of open source software.”

The following year, Kwan openly spoke about the Department’s IT strategy at an event held by the Australian Information Industry Association in Canberra. He was also active in wanting to explore inter-departmental approaches to the trend of environmentally friendly computing, as well as on other cross-government committees. And in a public blog post in December 2010, Maritime Safety Authority CIO Ewan Perrin described Kwan as one of the better-known CIOs in the Government’s small agency CIO mentoring program — listing Kwan alongside well-known AGIMO first assistant secretary Glenn Archer.

In one of his first interviews since taking the Immigration role, we put it to Kwan that he had some pretty big shoes to fill following Correll’s retirement. And the CIO is quick to praise the work that has gone on at DIAC before his time.

“I’d like to acknowledge the good work the IT team in DIAC has done in the past few years,” he says. “The Systems for People program is coming to a close, the Gershon savings have been implemented and we have rationalised our IT platforms, with the consolidation of six data centres into two.”

When Department of Defence CIO Greg Farr took up his role in November 2007, one of his first actions was gathering information — speaking to stakeholders in the business to find out what Defence’s IT operation was doing well and poorly. And the same has been true of Kwan.

In his new role, the CIO notes that his first steps have been ones of communication. “My process was to touch base with key stakeholders and business areas as quickly as possible,” he says. “I checked with them what we were doing well and where we needed to improve. I’ve tried to learn as much about key issues, challenges and priorities to determine what are urgent and important and what are non-urgent.”

And where Farr found a degree of negativity about Defence’s IT support, based on its past performance, it’s possible that Correll’s broadly positive reign has generated good karma within Immigration. “I have found the environment extremely supportive,” notes Kwan.

One of the interesting things which the CIO found is that although he notes the Systems for People project was broadly completed with the implementation of what Immigration terms its generic visa portal, there is still ongoing work within Systems for People at the department.

“Systems for People was completed with the implementation of the generic visa portal (GVP) in April 2011, which was a key milestone,” says Kwan. “We have also implemented successfully further system releases, termed CR2 and CR3, as part of our ongoing systems release cycle, which included enhancements to key Systems for People systems and portals.”

Kwan says the GVP implementation gives Immigration a “solid platform” to enhance and roll in new sub-classes to the visa system which lets people travel to Australia. At the moment, the system deals with sponsorship, nomination, temporary skilled sub-class 457 and general skilled migration applications. In addition it can issue bridging visas and cancel visas. However, the CIO says the department is also currently expanding its ability to receive visa applications online, using GVP as the backend platform for that functionality.

Although we weren’t game to mention the politically sensitive refugee issue, Kwan notes that Immigration is currently also undertaking work on what he terms its “irregular maritime arrivals program”, which he says will enhance the department’s case management portals to increase the functionality and reporting capability for detention services.

Kwan notes that while the Systems for People project was broadly completed with the implementation of the initiative’s generic visa portal (GVP) in April 2011, however, some incremental work is still going on in that area.

In short, although the cyclone of activity that was Systems for People has died down a little, the project is ongoing in many senses — and a core part of Immigration’s IT work.

Beyond Systems for People
However, as with any major government department, there are also a plethora of other IT projects going on at Immigration.

Kwan notes immigration is progressing its Windows 7 desktop migration. The project — first revealed in January 2011 by ZDNet.com.au will doubtless involve the support of Unisys, which has a contract to provide outsourced desktop services to the department through 2013. The rollout will constitute one of the largest deployments of Windows 7 in the Federal Government, alongside the Department of Human Services. It will also involved the rollout of Microsoft’s latest Office 2010 software.

Immigration’s business intelligence capability is also being worked on, and as with many other organisations, virtualisation is a key issue, with Immigration already having virtualised more than 70 percent of its infrastructure, according to Kwan. The organisation is also looking at better ways to support its workforce with mobile solutions — conducting an iPad trial — and is also looking into how to provide better service to staff working in remote locations.

However, when asked what are the top-line issues affecting Immigration’s IT function, Kwan appears less interested in specifics than the overall trends — like a strategist rather than a tactician. “It’s about managing supply and demand, implementing the capital works program and responding to urgent government and departmental priorities,” he says. And the labor issue — which plagued the Systems for People project — is still one that Immigration is grappling with, with Kwan noting the problem of working out how the department can “attract the necessary staff resources, given Canberra has a tight labour market”.

The CIO appears to take the same strategic approach to some of the biggest trends impacting the IT sector as a whole at the moment.

He notes Immigration considers cloud computing a “key technology platform” that the department would like to pursue in future — “particularly in terms of infrastructure, platform and storage”. And on the potential for a cross-departmental government cloud to be created: “It’s still early days, but we are quite open to talks with other agencies and the Australian Government Information Management Office on discussions of a private cloud.”

With Immigration’s high degree of existing virtualisation, Kwan says, talk of a G-cloud comes down to the value proposition involved.

The CIO feels the same way about IT shared services, a concept which has taken a dramatic beating in Australia over the past year, as both the Queensland and Western Australian state governments have broadly walked away from their disastrous IT shared services implementations, which had suffered from a lack of disciplined governance. The Victorian Government is also known to be struggling with its IT shared services organisation CenITex.

“We have no definite plans at the moment, but we are happy to discuss with other agencies on shared services opportunities if and when appropriate,” says Kwan.

There is no doubt that Kwan will see a significant role in the future development of Federal Government IT strategy. Alongside IT leaders from the Department of Defence, the Australian Taxation Office and the Department of Human Services, Immigration is one of a number of mega-agencies whose approach to technology helps shape that of the rest of the Government. Will the CIO prove to have a dramatically different approach from his predecessor?

So far it appears not, despite some intriguing flashes of innovation the CIO displays today and in the past — as well as his awareness of current industry trends. Kwan himself appears to be content to be judged by the results he will achieve in the next few years.

“My focus is very much on the present,” he says. “I will work hard to ensure DIAC IT continues to deliver and let the outcomes speak for themselves.”

Aussie cloud not a utility yet: Defence CIO

Renai LeMay — Mon, 26 Sep 2011 08:15:43 +0000

blog Fascinating comments about the state of Australia’s cloud computing landscape have just arrived from Department of Defence chief information officer Greg Farr (pictured), one of the most respected technology executives of any stripe in Australia.

In this feature article published in the Financial Review’s MIS Magazine (where your humble reporter spent some time a while back), Farr makes it clear he believes the Australian cloud is “a long way away” from looking anything like its US counterpart:

“[Providers] still see a commercial opportunity in value-added services, where a solution is designed around what the customer wants,” Farr says. “That’s a valid thing to do, but it’s different from the US model, which really is about buying [technology as] a commodity, the same as you buy electricity or water.”

With providers like CSC morphing the cloud model into unrecognisable shapes (sorry Bob!) and the cloud computing hype wave beginning to recede substantially in Australia, it’s hard to disagree with Farr’s comments. In my view, much of what is being labelled “cloud computing” in Australia should be more correctly labelled “managed services”, at least until we get more large-scale public cloud providers such as Amazon.com and Rackspace providing on-shore offerings. As always, Farr is one step ahead of the curve when it comes thinking about enterprise IT in Australia.

Image credit: Department of Defence

NSW creates health IT agency

Renai LeMay — Thu, 25 Aug 2011 05:51:04 +0000

The New South Wales State Government has opened a new page in its long and troubled history implementing electronic health solutions, committing yesterday to creating a dedicated agency to service the area, amid a much wider shake-up of the health sector in general driven by its new Coalition Government.

The state’s director-general of health, Dr Mary Foley, yesterday handed down a landmark report (PDF) into future governance arrangements for the state’s health department, with new Health Minister Jillian Skinner immediately welcoming the report and pledging to implement its recommendations. Among a number of other conclusions, the report noted that eHealth should be recognised as “the way of the future” in healthcare. However, it noted, NSW wasn’t currently making the most of its opportunities.

“In NSW, the current ICT governance model can be regarded as a ‘half-way house’, with staff and functions spread between the department, which has a strategic role, Health Support Services, which is responsible for rolling out major corporate and clinical systems, and area health-based ICT services which are currently located in the clusters,” the report states.

“The statewide roll out of major systems needs to be supplemented with pervasive clinical engagement at the local level involving multiple testing and iterations of new systems before they are implemented.”

NSW Health’s credibility on the issue of electronic health solutions has taken a battering over the past several years. In March this year, for example, a study published by Sydney University health IT academic Jon Patrick heavily criticised the FirstNet system implemented by the department to manage emergency departments.

At the time, some public sector doctors called for the system to be scrapped, as it had suffered a series of problems, such as allowing patient details to be assigned to the wrong patient. The platform it is based on was provided by US e-health giant Cerner.

“When do we stop throwing good money after bad?” Dr Sally McCarthy, who heads the Prince of Wales Hospital’s emergency department said at the time, according to the Sydney Morning Herald. “Anything that takes staff off the floor to spend their working time on an inefficient IT system is a detriment to patients.”

Another rollout, known as Healthelink, was kicked off back in 2004 with wider ambitions to solve the e-health records problem within NSW Health, but only had some 100,000 clients registered by mid-2010. It has since been integrated into the Federal Government’s much wider personal e-health records system, but is believed to have remained primarily in pilot or trial phase – without being extended to the wider NSW population.

NSW is not the only state to have suffered similar problems – with e-health record rollouts right around Australia suffering similar delays, fits and misstarts.

To resolve the problems in NSW, the state will now, according to the report, create a new agency, eHealth NSW, which will become “the system leader for the NSW Health information strategy”. Its first priority will be “a re-setting of strategy” based on extensive consultation with clinicians and other users and the redesign of ICT governance to ensure “clear statewide plans” and “an appropriate balance with local initiatives”. By the end of 2011, The State Government is aiming to have established eHealth NSW and to have developed “a strong governance framework for ICT”.

opinion/analysis
While there is no doubt that the creation of a new NSW eHealth group is an incredibly positive move by the new State Government, and a step in the right direction, it is also a move which is inherently designed for failure due to circumstances which are largely beyond its control.

In Australia, cases of successful e-health records implementations are currently few and far between, and this has little to do with a lack of funding or effort in the area (just look at the hundreds of millions of dollars which Victoria has ploughed into the area over the past decade), and everything to do with poor technology.

The first problem is that there are very few vendors which have a mature and robust e-health solution to provide to government at the moment. In the CRM and ERP spaces, to cite two other examples of business software platforms, there are currently hundreds of vendors selling many different competing solutions. If you look hard enough, you’ll find an application or a module for any given circumstance – and they’re fairly easily customized for your own use.

In the e-health area, there’s only a handful of major names, and some of these are experiencing a substantive degree of corporate change.

US-based Cerner is probably the biggest name right now, and Australia’s IBA Health used to be another. However, IBA several years ago bought rival iSOFT, which turned out to be a poison pill – with the company suffering a series of financial headaches which eventually led to it being bought out by US IT services giant CSC this year to help develop its own e-health practice.

There’s a few other companies bubbling along – such as Intersystems’ TrakHealth and even Medical Objects – but none have a huge profile, despite some successes.

The second problem is that implementing the solutions offered by these companies often ends up being problematic in practice. Cerner’s well-documented problems in emergency services are one example, while iSOFT’s problems in the UK with its giant nationwide rollout in that country are the stuff of legend in the health industry.

Often this boils down to the differing requirements of each health jurisdiction, with those implementing systems often complaining that a platform built for one country just doesn’t work very well in another.

Complicating all this is the fact that throughout the e-health industry’s problematic history, few implementations have involved the end users of the systems – health professionals such as doctors, nurses and specialists – as much as they should have. Health is a fraught area, and execution with limited resources is king.

Every time a major e-health platform is implemented, the screams of medical professionals can be heard a mile away. It’s as predictable as clockwork. These people don’t need a new system – they need to have management overhead removed from their lives so they can do their job more efficiently with what paltry resources they have.

For all these reasons and more, eHealth NSW will have its work cut out for it – as has the National e-Health Transition Authority and HealthSMART in Victoria before it. I recommend they start with a couple of small, extremely targeted projects and bed them down properly. If you can get them working so well that doctors in other jurisdictions start demanding the same thing … they’ll be onto a winner.

Image credit: Jimmy Harris, Creative Commons

Longhaus takes hammer to AGIMO cloud critics

Renai LeMay — Tue, 23 Aug 2011 01:36:54 +0000

One of Australia’s top technology analyst firms has come out swinging against vendors who had criticised the Federal Government’s peak IT decision-making body for being wary about embracing cloud computing solutions and lacking strategy in the area.

Last week, ZDNet.com.au reported that the global head of CSC’s cloud business had met with the Australian Government Information Management Office (AGIMO) to discuss cloud computing, but had come away from the talks with the view that the IT strategy arm’s view was that cloud was “not safe or ready for prime time”.

The news follows criticism of AGIMO’s draft whole of government IT strategic vision, released in mid-April this year. In June, CSC said the vision lacked strategy, having a “short-term focus” and Telstra noted the Government had a history of building and operating platforms internally, rather than taking a more strategic view of the evolution of the IT industry and using proven technology platforms.

However, in a blog post published over the weekend, Longhaus research director Scott Stewart backed AGIMO, pointing out that despite the ongoing push for a whole of government approach, ultimately chief information officers at each separate department would make their own decision about when to shift their processes into the cloud.

“AGIMO are there to support the CIOs with guidelines, standards and strategies and the AGIMO cloud strategy was balanced and well considered,” Stewart wrote.

“AGIMO highlighted that there is still some maturity needed before the public sector CIOs will be able to tick all the boxes. And they are right. Instead of the faultfinding commentary directed at AGIMO, a better approach would be working harder with AGIMO in establishing public sector cloud standards and a process of accreditation over the longer term. We hear that AGIMO and [the Australian Information Industry Association, which represents vendors] are working towards this, which is a positive step.”

In general, Stewart noted there was still some maturity needed in the cloud computing industry.

“Interesting to see that the marketing machines of some cloud vendors are now repeatedly using the terms “safe” and “trusted”. These marketing messages are designed to distance themselves from the string of recent cloud outages from cloud vendors such as Amazon, Ninefold, Microsoft Office365 and BPOS etc,” he wrote. “It seems to me that there is a disconnect between the marketing approach of some with the reality that comes with the ICT portfolios that CIOs are dealing with, both in the public and private sectors.”

The analyst noted that a number of factors needed to be considered when shifting workloads onto cloud computing infrastructure, and CIOs had due processes and “a lot of boxes that need to be ticked first”.

“So if the CIO needs to be aloof to make a careful and considered decision on the correct timing for cloud adoption, then aloof is a good thing and the quarterly sales targets will just have to wait,” he wrote.

opinion/analysis
I partially agree with what Stewart is saying.

It should be extremely obvious to the entire Australian technology sector right now that cloud computing has passed the ‘peak of inflated expectations’ and has now entered the ‘trough of disillusionment’ in that wonderful Gartner hype cycle which we know and love so well.

The wave of cloud computing has washed over Australia and, apart from a few early adopters, has left more infrastructure completely intact and most processes unchanged. As we’ve seen recently with CSC, vendors are now switching their cloud models to more closely align with the short-term tactical demands of end user organisations.

In this context, AGIMO’s softly, softly approach to cloud computing — largely mimicked by most of its stakeholder agencies — has looked rather visionary.

However, cloud computing is an umbrella term covering a multitude of different technologies. Right now, in Australia, the infrastructure as a service space is evolving very rapidly, and is, as Stewart says, not quite baked yet. However, the story is quite different when it comes to using software as a service, for example, and there are some very mature SaaS platforms out there which many organisations, including in sensitive sectors such as financial services, have recently adopted very quickly in targeted, turnkey rollouts.

I’m talking here about platforms such as Salesforce.com, Microsoft BPOS (now Office 365), Google Apps (particularly in smaller departments), Oracle CRM On Demand, SuccessFactors, Yammer and even home-grown tools such as Atlassian’s Jira and Confluence tools. If government departments and agencies aren’t already using these tools, they should at least be examining them — because they are low risk, and their ability to increase business agility and free up resources can be remarkable.

Moving your entire organisation “into the cloud” … well, this statement just doesn’t mean anything. Where the benefit of cloud computing is right now is in very granular, targeted deployments to solve specific business problems. And on this front, although AGIMO has published some examples in this light, I don’t think it’s doing enough to stimulate adoption.

Overall, however, I welcome Stewart’s comments. Good to see some progressive discussion rather than the usual bitching about AGIMO :)

Image credit: J. D. Hancock, Creative Commons

Why on-premise private cloud matters

External Contributor — Mon, 22 Aug 2011 01:07:33 +0000

In this letter to the editor, CSC Australia and Asia chief technology & innovation officer Bob Hayward responds to our critical comments about the company’s recently launched BizCloud offering. Hayward is also a former director of IT advisory at KPMG and a former senior vice president and Gartner Fellow.

Hi Renai,

Glad to see you noted the CSC announcement of BizCloud in your blog this week, but obviously keen to address some of the opinions and analysis you shared in your article.

I am in agreement with you about some aspects of cloud computing. I personally don’t like the word ‘Cloud’ to describe these new ‘as-a-service’ styles of delivering IT based solutions we are now seeing in the market. It is not a word that inspires confidence, and actually has negative connotations, especially in Asia. However, the horse has well and truly bolted, so rather than try to swim against the tide, I guess we are now stuck with Cloud as the word to use, although I think the word ‘Utility’ is more descriptive and appropriate.

I also feel that using the term ‘Private Cloud’ to describe a service like BizCloud is not particularly helpful, even if it is a true statement. The reason I say that is because as soon as CSC uses the word ‘Cloud’ around our private cloud solutions, conversations with our clients immediately take on a different nature. Potential customers of BizCloud tag this serviced with all the issues that surround public clouds, asking questions about data sovereignty, privacy, security, compliance and other issues that are not relevant at all when talking about an on-premise (behind firewall) private cloud. They want to bring in lawyers to the discussion and use different procurement guidelines or contracts that have been recently especially designed for Cloud Computing – all of which is totally uncalled for.

I’d like to respond to your analysis with three points. The first is around cloud definitions, the second is about the need for Private Cloud at all, and the third are a series of statements about your analysis of BizCloud.

Let’s start with the whole concept of Private Cloud, where you seem to have the view that the only Clouds worth the name are public ones (something I see a lot in the industry). Back in March 2010, CSC announced that we would adopt the US Government definition of Cloud Computing as detailed in materials published by the US National Institute of Science & Technology (NIST) in late 2009. We thought that using these standard definitions would be better than having our own taxonomy or using the (many different) definitions of cloud computing then being put forward by other providers, analyst firms or journalists.

The NIST clearly defines five characteristics, three service types and four deployment models for cloud. One of those deployment types is Private Cloud.

The CSC BizCloud offering conforms to the NIST definitions for cloud computing.

BizCloud supports self-provisioning, is charged for on a metered consumption basis, enables multi-tenants (where the tenants in this context are different lines of business or workloads within a larger enterprise, that previously did not share IT resources), is elastic (clients can flex up and down their use of BizCloud from physical resources that are all ready and only pay for what they consumer on an hourly measure) and is accessible through standard IP network protocols and browser interfaces. Those are the five characteristics as defined by NIST.

BizCloud offers Infrastructure-as-a-Service and can be used to host both Platform-as-a-Service and Software-as-a-Service for use by both internal and external clients of enterprise IT – all three service types as defined by NIST. So BizCloud ticks all the NIST boxes, and therefore is by standard definition a Private Cloud, offered as a service.

My second point is to discuss the need for Private Clouds.

CSC does see a clear demand for Private Cloud in medium to large scale organisations in Australia. You suggest in your commentary that somehow this is a failure of Enterprise IT, which has been under attack for decades as being too conservative or risk averse. But few commentators around the so called failings of enterprise IT have ever walked in the shoes of the IT staff working in most Australian enterprises. There are MANY sound reasons why medium to large scale organisations would prefer to use private clouds rather than public clouds in Australia today for many parts of their portfolio of IT systems and solutions:

In recent times, several high profile public clouds have failed disastrously in different parts of the world, with very poor business continuity and weak backup. There is not a great deal of confidence in them.
In the Australian context, most high profile public clouds are offshore. That raises all kinds of very legitimate issues around compliance, sovereignty, adherence to Australian legislation around privacy, etc.
Most public clouds would ‘lock in’ the user. They are not compatible with other clouds. The more work a customer performs in some public clouds, the more difficult it becomes to extricate from that provider and switch to another one.
There are performance issues in using clouds that are remote from the user. This is especially true for extreme transaction processing (there is a reason so many datacentres are right next to the stock exchanges of the world and why brokerages pay a premium fee to have their servers located within the exchanges themselves).
Very few applications within medium to large enterprises are discrete and can be ‘spun off’ as a whole to a public cloud. They are mostly intertwined through integration with other platforms (e.g. getting data from DBMS systems accessed through mainframes or midrange UNIX systems in the datacentre) or with all manner of inter-dependencies. It is much easier (and perhaps only possible) to have elements of these custom and legacy systems hosted in a cloud close to the other components that deliver the end solution than try to run integration between a remote public cloud and the in-house datacentre. Very few people outside of large enterprises really understand the challenges around IT architecture and public cloud.
Enterprise IT is waiting for a compelling event. Only when new investment is considered for whatever reason (refresh, end-of-life, change of provider, new project) is a cloud approach considered alongside other options, and public cloud only seems suitable for certain types of workloads amongst the large portfolio of systems that exist.
There are many commercial inhibitors to using public clouds. As just two examples: Large organisations have already paid for their datacentres, so why not take full advantage of them? Many enterprises have entered into software license schemes where they can use software internally at low cost in new implementations, but that would cost more if it was used by them in an external public cloud context.

CSC does see value in Public Clouds. We have our own right here in Australia (CloudCompute), and we support many clients adoption of others. But we also see the real value that private clouds deliver. We have been listening and working with our customers to develop a cloud based offering that meets their requirements while addressing many of their concerns.

Now for my third point, some thoughts about BizCloud in response to your analysis of BizCloud specifically.

Regarding elasticity. CSC over-provisions the installation of BizCloud within the client environment using a new commercial model with our hardware and software partners, in a way that the customer does not have to pay for resources already installed and ready until they are consumed, and when the client starts to reach 70% or more utilisation of the BizCloud on a regular basis, we upgrade to a larger fabric. The client can flex up and down within the band of 30%-100% on a true pay by the hour basis. And we size the initial setup of the BizCloud to suit multi-year forecasted demand, which is much easier to do for a single enterprise than it is for a consumer-oriented public cloud.

You made a point that CSC’s BizCloud will be constrained by the customers own datacentre capacity. This is true (to a point, since clients can always burst workload into CSC’s public cloud CloudCompute in Australia). But how is this significantly different from most public clouds? In CSC’s BizCloud offering we propose a 10 week onboarding program which includes an environment and workload assessment to determine the necessary capacity in power and cooling needed to support the application workload targeted for the service. You also used the example of a company using public cloud in Australia, but their cloud provider’s datacentre limitations are no different than many potential users of BizCloud in Australia.

Many Private Clouds around the world today are much larger and housed in bigger datacentres than many public clouds. And here it gets a little confusing, but many private clouds will actually be housed in the same datacentres as some public clouds (!). A specialised datacentre operator, such as GlobalSwitch in Australia, will have multiple private and public clouds housed within the one facility. In any case as stated before, we are dealing with more predictable forecast demand when servicing the needs of one enterprise, so the issue of datacentre constraint can be planned for more effectively and the risk reduced.

Another point you made is that once the BizCloud service is installed at a client facility, customers will ask for all sorts of non-standard customisations and different payment models and CSC will likely comply. CSC offers BizCloud as a standard service with a published rate card. The standard service supports several different configurations of software (such as choice of OS, middleware, applications) and four different service levels (from Bronze through to Platinum). CSC believes BizCloud will support the majority of X86 style workloads. CSC will not change the type of payment model (which is based on the use of vRAM) in the BizCloud offering.

The whole purpose behind having a standard offering is to exploit the match with our own public cloud CloudCompute and other BizClouds for consistent service, common tools for service management, collaboration for disaster recovery, backup, reduced costs through scale, and so forth. There are also issues around being a certified vCloud Director service, where CSC offers full support for VM portability and standards across all other vCloud Director service compatible cloud offerings, whether private or public and whether from CSC or from other service providers.

Having said all of that, CSC is one of the world’s largest IT Systems Integrators, and of course if a client wants our help in building a custom private cloud with different options in hardware, software or configuration, we will consider that opportunity. But that is not BizCloud.

Renai, you also claimed that the “only” differences between BizCloud and a normal, contemporary managed service is pay-as-you-use and the use of standardised infrastructure. The change to pay-as-you-use in an elastic (up & down) consumption model within a client’s own premises is not at all trivial, we feel it is extremely significant and not at all easy to achieve. It has taken over a year of negotiation with our chosen partners to arrive at a shared risk commercial model to support BizCloud.

And there are many other differences between BizCloud and a contemporary managed service for compute or storage. Not many contemporary managed server/storage offerings support the service catalogue, service orchestration, billing, multi-tenant (in the sense of multiple LoB on one platform), self-provisioning, automated workflow, integration into clients ITIL-based service management and security features found as standard in BizCloud.

Apologies for such as long response, but this is such an interesting area for debate!

Image credit: CSC

CSC offers “on-premise private cloud”

Renai LeMay — Wed, 17 Aug 2011 06:44:11 +0000

Multinational IT services giant CSC this week launched in Australia a service which it described as private cloud computing infrastructure which could be hosted in customers’ own datacentres, giving them an additional option for migrating to the burgeoning range of infrastructure as a service platforms.

Private cloud refers to a form of cloud computing infrastructure which is typically segregated from the infrastructure used by other users. It consists of highly virtualised storage and processing bundles and is typically hosted by large organisations in their own infrastructure, or outsourced and managed by an external provider. For example, top-tier bank Westpac is known to operate its own internal private cloud solution, which it uses to provide services to different divisions within its larger overall operation.

The service launched by CSC in Australia this week differs in that it focuses on a standard set of infrastructure based on the vCloud offering from the VMware, Cisco and EMC (VCE) alliance, but with the infrastructure actually hosted on a customer’s own infrastructure.

“By offering this service, CSC has taken the work out of implementing a private cloud and overcomes the objections that security-conscious organisations usually raise around cloud adoption,” CSC said in a statement, noting that its service had been branded ‘BizCloud’.

“Australian organisations have been uncertain about the move from traditional IT to the cloud. In an Australian first, customers can now take a safe first step to a preconfigured, integrated and tested private cloud on their own premises in just ten weeks,” said CSC Australia chief technology & innovation officer Bob Hayward.

The service appears to allow customers to migrate their workloads onto the on-premises private cloud model as a first step, before ultimately examining the case to shift work onto private cloud infrastructure located in CSC’s own facilities, or even perhaps ultimately onto a public cloud. CSC is offering a number of different tiers of service for the solution, with prices scaling for bulk usage and an open rate card.

The news comes as interest in cloud computing infrastructure in Australia continues to grow, with vendors continuing to launch new solutions in the market and organisations increasingly examining the case to migrate services onto the cloud. However, not everyone is immediately keen to migrate services onto the cloud.

Queensland Rail, for example, this month avoided the cloud completely as it flagged plans to outsource its significant server, storage and network fleet, with the organisation preferring to own and use its own infrastructure as a managed service.

opinion/analysis
“On-premise private cloud”, my ass. CSC might as well just call this a managed service and be done with it. Frankly, describing this as cloud computing infrastructure is really quite a misnomer. Not only is the service hosted on customers’ premises, but there would appear to be little real opportunity for dynamic expansion of the services used, as in the classic cloud computing paradigm.

Any expansion will necessarily be limited by what ability the customer’s own datacentre has to expand in terms of power usage, cooling, rack space and so on. Just like any other managed service.

The only real difference between CSC’s “on-premise private cloud” and a normal managed service is the pay per use model, plus the use of a standardised infrastructure. But when the boxes actually go into a customer’s premises and the services start to be used, I’d bet anything that the customer will start to request non-standardised services and different payment models if they feel like it — and then CSC will buckle, follow the money, and the case for calling this “cloud” will be even further weakened.

Australia has seen a few high-profile cases over the past year where the infrastructure as a service model has worked really well. I’m thinking of organisations like equipment manufacturer Komatsu and some universities which have fundamentally changed the way they consume server and storage resources by shifting their workloads into external providers’ clouds wholesale.

But in general, most large Australian organisations — especially in the dominant government and financial services sectors, which consume IT resources heavily — haven’t yet bitten the cloud bullet hard, and I’m starting to suspect they won’t, for quite some time. Or, if they do, they’ll build their own.

This new service being offered by CSC smacks of a slight desperation — a shift to come a little too close to the customer, in an attempt to offer them an easy on-ramp to the cloud journey. Is this the first sign of a pushback by Australian organisations on the much-hyped cloud computing model? Only time will tell.

Image credit: BasicGov, Creative Commons