blog You may remember that last week we were fairly hard on IT services outfit Dimension Data for issuing what we saw as a media release heavy on hype (mentioning cloud computing 71 times) but light on technical detail. Well, to the company’s credit, it has now come through with the goods, responding to all of our questions on its cloud computing offering in full.

The following responses to our cloud computing questions are from Steve Nola, DiData’s CEO of Cloud Solutions and former MD of the company’s Australian division.

What technologies does DiData’s cloud use (storage, processing, networking, virtualisation, management and so on)?

We use industry-leading technology vendors. Our Managed Cloud Platform (MCP) architecture provides choice for clients:

• Storage: EMC and NetApp
• Processing: Cisco UCS, Dell, HP
• Virtualisation: VMware
• Management: As part of the Opsource acquisition we have our own cloud management system called Dimension Data CloudControl that provides the automation, orchestration, billing, provisioning and federation. We have an open API set based on REST and it is published and available. This allows third party application providers to write to our cloud management system. Whatever can be done through the web can be done through the API.

Below are two graphics showing the CloudControl system and the MCP technology components:

Where is it located (South Africa? Australia? The moon?)?
Today, we have our public MCPs physically deployed in San Jose, California, and Ashburn, Virginia, USA; Amsterdam, the Netherlands; Sydney, Australia; with Johannesburg, South Africa and Hong Kong to be deployed by the end of March.

How much does it cost to use it?
Our public cloud pricing is available on our web site. Please refer to our Public Compute-as-a-Service pages and our pricing options can be downloaded here (PDF).

How is the multi-tenanted cloud environment set up — what sorts of customers will be using this section?
Our public cloud is by definition multi-tenanted. We also have solutions for clients that what a private cloud service (fully dedicated) or ‘Hosted Private Compute-as-a-Service’ (some level of sharing of infrastructure) and managed hosting service for certain applications. All of our cloud offerings are managed through the same Dimension Data CloudControl system. So regardless if you are using a public or private cloud (or you are ‘bursting’ from private to public in a hybrid) the cloud management system is consistent. All of our public cloud offerings globally are connected into our ‘Cloud Exchange’. This allows VMs is be initiated on any of the public cloud services around the world. We also allow private cloud services to participate in the Cloud Exchange as well, allowing hybrid services.

What is the guaranteed uptime/availability?
We offer four standard guarantees for our public compute services. These focus on availability and uptime, performance and service responsiveness. Dimension Data provides a 100 percent availability guarantee on both server and network, which means we reimburse clients for server or network unavailability encountered on the system as a result of any issues relating to the MCP. Additionally, we guarantee that there is less than one millisecond latency between servers on our cloud platform, which enables clients to design with confidence server-to-server type applications to run on our cloud service. And, Dimension Data’s cloud service has a 24/7 service desk and we guarantee to respond within 30 minutes of any critical incident being logged with our helpdesk.

Which virtual environments are supported (Windows, Linux, Solaris, etc)?
We support Windows Server 2993 Standard and Enterprise, Server 2008 Standard and Enterprise, Red Hat, CentOS and Ubuntu.

How possible is it to migrate workloads in and out of DiData’s infrastructure from and to the infrastructure of other providers?
On our public MCPs, our workloads are publicly addressable, so it’s quite straightforward to physically move a workload from one cloud server to another. Our REST-based open API set gives our clients the ability to schedule or automate shifts in workloads. However, it also requires the other cloud provider to have a published API.

What applications are supported on a ‘as-a-service’ model?
Our initial launch has focussed on our compute-as-a-service offerings, We have a roadmap for additional services which will be rolled out during 2012. In the meantime, our US team continues to support Web-based applications for clients as part of our managed hosting services.

Image credit: Dimension Data

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2. DiData lands Aussie customer for new cloud
3. Your cloud data was never secure, says Microsoft

news Technology giant HP has announced a six-year multimillion-dollar infrastructure technology outsourcing services agreement with Downer EDI Limited, an Australian-based engineering and infrastructure management services company.

Downer provides services to both public and private sectors of minerals and metals, oil and gas, power, transport infrastructure, communications, water and property, across Australia, New Zealand, Asia-Pacific and the United Kingdom.

The announcement provides further information about the deal that was initially inked in July 2011. The agreement will enable Downer EDI to move from the current “fragmented and inefficient model to a single data centre, operating system and network,” Grant Fenn, Downer CEO had said. The arrangement is intended to reduce risks, boost business performance and save costs too.

Rapid business growth, both organically and through acquisitions, has made the company’s IT environment old and fragmented. According to Joseph Amoia, CIO, Downer, this has been inhibiting the organisation’s growth. “Simplifying and consolidating our IT infrastructure with HP’s innovative, industry-leading infrastructure services will improve collaboration across our business and drive profitability,” Amoia said.

HP Enterprise Services will build, manage and host the organisation’s technology infrastructure on HP Converged Infrastructure. HP will deliver an efficient network, scalable infrastructure, a platform for collaboration and a streamlined service management framework, under the agreement. Currently, Downer has eight data centres, five data networks, thirty-six operation systems and multiple email systems. The company will transition from its current model to a streamlined single virtual data centre, operating system and network through the partnership with HP.

The IT resources that Downer needs to simplify applications, improve business processes and enhance operational efficiency and reliability will be provided by HP’s Data Centre Services. The consolidation and standardisation will enable improved agility and visibility in the company’s operations, lowered operating costs and risk reduction.

The deal involves the provision of the following IT services from the new HP Next-Generation Data Centre in Sydney:

• Data Centre Services: Applications presently housed on thousands of servers across Downer will be migrated to HP BladeSystem servers running Microsoft Hyper-V. This is intended to reduce the data centre’s carbon footprint by 75 per cent by reducing power consumption, overall costs and its impact on the environment.
• Network Management Services: HP will consolidate multiple networks into a single network that it promises will be more resilient and reliable.
• Workplace Services: This will deliver a single Active Directory and an email service built on the HP Enterprise Cloud Messaging platform. The single Active Directory will improve collaboration through presence, allow instant messaging and simplify file sharing. HP also plans over time to refresh Downer’s 6,500 desktop and notebook PCs to put together a single standard desktop operating environment that is easier to maintain and less expensive to operate.

Alan Benn, vice president, HP Enterprise Services, South Pacific, said that Downer requires a technology infrastructure that enables collaboration and quick adaptability to change, to capitalise on growth opportunities in the competitive market. “By drawing on HP’s extensive expertise in managing technology environments for global organisations and our superior service management capabilities, Downer will be able to focus on delivering innovative, market-leading offerings instead of worrying about operational stability and costs,” Benn explained.

HP will assist Downer on its Instant-ON Enterprise journey to improve business performance and drive growth.

Image credit: wlodi, Creative Commons and HP

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news Global IT services outfit Dimension Data has announced a new range of global cloud services, simultaneously revealing it has signed up the Australian Centre for Advanced Computing and Communications to use the platform.

The new Dimension Data Cloud Services, according to a statement by the company issued late last week, will enable customers to be more agile, lower their IT infrastructure management expenses and minimise the complexity of cloud migration. Dimension Data’s Managed Cloud Platform (MCP) is the global delivery platform for all its cloud services, and Dimension Data Cloud Control is a cloud management system that automates provisioning, orchestration, administration and billing. The two services are now going to be utilised by ac3 (Australian Centre for Advanced Computing and Communications) under a new contract between the two companies.

ac3 provides IT infrastructure management services to clients including the NSW Government. It offers a wide variety of managed services including operating systems management, database administration, network and security management and storage management.

“Dimension Data was the clear choice for managing our clients’ cloud computing environments. We were impressed by the inherent security features as well as the automation of cloud resource provisioning,” said Philip McCrea, CEO of ac3, in DiData’s statement. “This initiative enables us to offer our clients a valuable additional level of service by providing them with infrastructure to run their business applications instead of them having to procure their own equipment. Combining Dimension Data’s platform with ac3’s experience gained from co-location and managed services, gives us the ability to deliver cloud computing solutions to our clients with improved service level agreements.”

DiData said its new cloud suite is designed to address the many requirements of an organisation’s path to the cloud, whether at the beginning of its usage of cloud and virtualisation, or well on its way to leveraging the benefits of self-service, hybrid cloud models. The primary claimed advantage of using Dimension Data’s Cloud Services is that all services are delivered on the same platform making it easier and more cost-effective to expand from one cloud model to another when the demands of the business change.

Dimension Data’s MCP will be a key part of ac3’s Infrastructure as a Service (IaaS) offering along with storage, data management and perimeter security services. The pre-configured infrastructure, according to the company, provides ac3 access to an orchestration layer for the deployment of cloud infrastructure that will allow ac3 manage its clients’ migration to the cloud more effectively.

In its media release, DiData said its cloud services would range across a number of areas, from advisory and consulting services to cloud systems integration, to public, private and hosted private compute-as-a-service offerings, to managed hosting and managed services, to applications services.

“Our clients realise the transformational potential of cloud computing, whether it’s moving into new markets, launching new products, or improving IT efficiency,“ said Steve Nola, CEO of Dimension Data’s Cloud Solutions Business Unit and former leader of the group’s Australian division. “They’re also aware that migrating to the cloud is complex, with significant implications to their business across operations and IT. Our Cloud Services are designed to help clients reduce cost, move faster and manage risk effectively.”

opinion/analysis
Not since CSC Australia issued a media release claiming it was offering “on-premise private cloud” has an Australian IT services organisation issued a media release so full of complete and utter waffle about cloud computing as DiData did last week. The company ought to be ashamed about the lack of technical detail which it included in its statement about its new cloud offerings.

DiData is a great company. Out of all the systems integrators and IT services companies in Australia, it’s one of my favourites. And I regularly hear good things about them from end customers (chief information officers and the like). However, the media release which the company issued this week announcing its new suite of global cloud services said absolutely nothing about what the company will actually be providing and simply appeared to cram in as many mentions of the word “cloud” as was humanly possible. For the record, it was 71 times in one media release.

I’d like to see the following basic questions about DiData’s “cloud” offered before I put any credence to the company’s claims that it can aid organisations in helping customers to be more agile, lower infrastructure expenses and reduce cloud migration complexity and risk:

• What technologies does DiData’s cloud use (storage, processing, networking, virtualisation, management and so on)?
• Where is it located (South Africa? Australia? The moon?)?
• How much does it cost to use it?
• How is the multi-tenanted cloud environment set up — what sorts of customers will be using this section?
• What is the guaranteed uptime/availability?
• Which virtual environments are supported (Windows, Linux, Solaris, etc)?
• How possible is it to migrate workloads in and out of DiData’s infrastructure from and to the infrastructure of other providers?
• What applications are supported on a ‘as-a-service’ model?

That’s just a start. I’ve got plenty more questions where those came from. If someone from DiData wants to get in touch (perhaps in the comments below this article) to provide some illumination on the situation, that’d be great.

Image credit: BasicGov, Creative Commons. Opinion/analysis by Renai LeMay.

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2. After a decade, Nola gives up DiData reins
3. Dimension Data provides further cloud details

news Australian diversified ICT services group Data#3 Limited on Monday reported a 15 per cent increase in group revenue at $435.8 million for the second half of 2011, in line with projections and well ahead of overall industry growth. However, the net profit after tax (NPAT) of $7.2 million was down 9.5 per cent from the previous year, which was a particularly good one for the company.

Data#3, headquartered in Brisbane and with offices in most of Australia’s capital cities, provides expertise in software licensing, managed services, human resources, and integrated solutions to deploy hardware and software infrastructure. Data#3’s customers cover a wide range of industries in Australia and Asia Pacific, including manufacturing, banking and finance, tourism and leisure, mining, healthcare, distribution, legal, government and utilities.

The current financial figures are consistent with Data#3’s track record; the company had reported a 23 per cent increase in overall revenue in the first half of the last financial year. Total revenues of $697 million were generated in 2010/11.

In a media release, the company attributed its good performance to strong growth in software licensing (up 24 per cent), managed services (up 33 per cent) and recruitment and contracting (up 15 per cent). It added that customer investment in technology projects to drive transformational change saw a sharp decline in the second quarter because of market uncertainties, stalling growth in the company’s project services and hardware product businesses. The revenue consequently declined approximately 3 per cent over 1H11, and 18 per cent over 2H11, causing group sales margins to decline 0.9 %.

Expenses increased by 13.3 per cent over 1H11 due to the continuing programme of investment in operational efficiencies and increasing capacity to support long-term growth. Even so, the 1H12 NPAT of $7.2 million is seen as well ahead of the long-term trend.

Data#3 Managing Director John Grant commented that with industry dynamics going through a challenging period, this was a very solid first half result, headlined by strong revenue growth and profit ahead of the trends of recent years. He said: “Contracted revenues from software licensing, managed services and recruitment and contracting grew strongly, but this was offset by delay or deferral of projects requiring significant capital expenditure. This flowed through to our first half with project related hardware and services revenues and contribution to profit declining.”

Grant expects conditions to remain challenging for the market up ahead and the uncertain conditions that marked the first half to continue for the remainder of the financial year. “Under these circumstances we are not in a position to provide guidance for the full year and we will keep shareholders informed,” he added. Reflecting the company’s strong cash flow and balance sheet, Data#3’s directors declared an interim fully franked dividend of 3.45 cents per share representing a payout ratio of 73.9 per cent, consistent with 1H11. The interim dividend would be paid on March 30th, 2012.

opinion/analysis
To be honest I’m surprised how well Australia’s IT software, hardware and services markets have held up following the global financial crisis. The IT industry in general doesn’t look to be growing fast, apart from in a few areas such as Internet-based transactional startups, but it is holding its own as a key part of the economy. This is good news for all those that work in it :)

Image credit: Tim Reeve, royalty free. Opinion/analysis by Renai LeMay

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news The Australian division of fast food chain McDonald’s today confirmed long-running industry rumours that it had given incumbent IT outsourcer IBM the boot, instead picking rival firm Unisys to support its IT infrastructure in a new five-year deal worth about $30 million.

In August this year Delimiter received an anonymous tip to the effect that IBM had lost the McDonald’s account, with the tipster alleging a competitor had beaten it in a competitive tender on a number of grounds. Big Blue’s top-level management wasn’t happy with the situation, the tipster claimed at the time. “Heads will roll.” However, we were never able to verify the story, with McDonald’s maintaining IBM remained a key supplier. Until today.

This morning, Unisys issued a media release noting McDonald’s had contracted it to provide IT support services to McDonald’s in Australia, New Zealand the South Pacific region. “Under the terms of the contracts, Unisys will provide service desk, on-site and remote support services to McDonald’s chain of more than 1,000 company-owned and franchised restaurants across Australia, New Zealand and the South Pacific region, including New Caledonia, Fiji, Tahiti, American Samoa and Samoa,” Unisys’ statement noted.

“Unisys will provide its Smart On-Site Services for end-to-end support of technology used in the McDonald’s restaurants, including point of sale devices, back-office PC equipment, peripherals, wireless networks, customer order display units and cameras.” Unisys’ central service desk supporting McDonald’s will be located in Wellington, New Zealand, and will provide 24×7 coverage — matching the operating hours of many of McDonald’s restaurants.

McDonald’s chief information officer Henry Shiner said Unisys had been chosen because the company needed a partner which could provide support across “a widespread geographic region” to agreed performance levels. A McDonald’s spokesperson confirmed the work had previously been provided under a contract with IBM, but stressed the company remained an important supplier to the fast food chain, especially in the area of systems integration.

IBM is believed to have supplied IT services to McDonald’s for some time. Big Blue published a case study (PDF) at one point detailing how it had implemented a PC-EFTPOS system from 205 that would integrate its point of sale platform with its existing IP network. The project allowed McDonald’s to connect securely to the bank which handles its transactions.

“After a series of pilot projects, IBM implemented the new system across 720 restaurants within three months,” IBM wrote in the case study. At the time, McDonald’s was using Telstra for its network connections. The fast food giant’s current CIO, Henry Shiner, stepped on board a little after that point — in March 2007.

opinion/analysis
I’m not surprised to see Unisys pick up this work. The company right now is one of the kings of desktop support services in Australia — holding huge contracts with major organisations like the Departments of Defence and Immigration and Citizenship. I’m sure Fujitsu and a few others had a stab at it as well.

I would view McDonald’s move as primarily a cost-cutting endeavour. Most CIOs are loathe to switch their major outsourcing partners around, as the transition period typically involves a significant changeover effort and lots of to-ing and fro-ing. It looks like IBM has been a long-time supplier to McDonald’s in a range of areas. Now that a few projects are out of the way — such as the point of sale integration conducted a few years back, Shiner is likely betting that he can take some costs out of his outsourcing budget.

IBM isn’t usually the cheapest partner on the planet. But you go with them because they have almost limitless resources and everything you can need in-house — from soup to nuts.

One thing further: When we first got the anonymous tip about IBM losing the McDonald’s account, I was a little suspicious. It turns out the tipster got almost everything right. However, they also claimed that McDonald’s was one of IBM’s biggest clients in Australia. I would be very surprised if this was actually true.

$30 million is not a huge amount for an IT outsourcing contract — in fact it’s at the lower end of contracts that I would bother reporting on. IBM has signed many contracts in Australia worth many hundreds of millions of dollars. Westpac, DIAC, Telstra and more … the list of IBM’s scalps locally is endless, and McDonald’s is hardly a huge client for a company which makes revenue of $4 billion in Australia every year.

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news The Federal Department of Health and Aging has accused technology giant IBM of causing a “catastrophic failure” in its IT systems stemming from an update to its storage environment that took down a number of services for a period of time this week.

The department’s secretary Jane Halton sent a staff-wide email (first reported by Crikey) to the department’s employees yesterday acknowledging the issue. “As you are no doubt painfully aware, changes made by IBM to the department’s IT storage environment over the weekend have resulted in a catastrophic failure in our IT systems that has significantly affected everyone,” she wrote.

“I spoke to the managing director of IBM yesterday and this morning and am writing to him today to express my extreme dissatisfaction with this completely unacceptable event on top of the delay to the implementation of our new desktop hard and software systems. This letter follows recent meetings that I, Paul Madden, the chief information and knowledge officer and deputy secretary Andrew Stuart have had with senior IBM executives on the desktop delay.”

IBM issued a statement this afternoon noting that “a regular update” to the department’s storage environment had resulted in IT system performance issues on Monday. “IBM and DoHA worked closely together and this issue is now resolved,” the company said. “IBM is committed to supporting DoHA to deliver high quality services to its customers.”

Halton said she acknowledged the department’s communication with staff on the issue had been inadequate and had asked that communication processes be reviewed to ensure staff are “more appropriately advised of any future IT problems and attempts to fix them in future” – “hoping and planning, of course, that we do not have another issue like this again”.

“Our own departmental IT staff worked very hard with IBM on resolving the issue yesterday, overnight and continue today to attempt to fix the problem and restore the system as soon as possible,” said Halton. “I want to thank our IT people for their efforts and energy, and acknowledge the unfortunate disruption to all staff which we are working as hard as possible to resolve.”

“Once the system is restored a joint review will be undertaken to ensure a similar failure does not recur for staff and any potential financial penalties are applied.”

IBM has had a long-running IT outsourcing relationship with the department, dating back to 1999. The pair recently renewed their vows in the closing months of 2010, inking a deal worth some $109 million over four years which will see IBM continue to provide a range of services to the department, including mainframe, mid-range, storage, help desk and end user computing services. In addition, Big Blue said at the time that it would also provide new security compliance solutions and will conduct mainframe and storage upgrades.

It will also include the rollout of a desktop virtualisation platform to all of DOHA’s 4,500-odd staff.

opinion/analysis
Things just never seem to go well for poor IBM when it comes to the Department of Health and Aging. The pair’s relationship was under fire late last year and early in 2011 due to what some saw as a lack of proper tendering processes in their new contract. And now this storage upgrade – which appears to be part of the new deal – has suffered what appears to be a substantial hiccup.

One also wonders just what Halton was referring to in her email when she wrote of other delays in IBM’s implementation of desktop systems in particular. Desktop virtualisation projects are notoriously difficult to get right. It would be interesting to know what kind of problems are happening in that arena in Health. This is what we wrote when the desktop virtualisation deal was signed last year:

Perhaps the most interesting part of the new agreement will be the included rollout of a desktop virtualisation platform to all of DOHA’s 4,500-odd staff.

“Commencing in the first half of 2011, IBM will deploy a virtualised thin client desktop solution across the entire department, enabling the movement of staff and workloads at a moment’s notice, whilst lowering technology support costs and increasing network performance,” IBM’s statement said. It is not immediately clear what technology the virtual desktops will be based on, but one possibility is VMware’s View platform, which has recently won a number of small customers around Australia.

The thing about desktop virtualisation projects, of course, is that datacentre-related outages, which is what appears to have happened to DoHA on the weekend, also have the potential to take down desktop systems across the whole organisation.

We must also, however, give a degree of credit to IBM and Health’s own IT staff for the speed at which it resolved the outage. “Catastrophic” is a term usually applied to outages which last for a week or more … you know, like they have at Victorian shared services agency CenITex. A few days’ outage is more of a substantial inconvenience. The speed of resolution especially appears surprising given the involvement in storage systems in the outage.

In this writer’s experience, any time a storage system suffers serious problems in a corporate IT environment, the organisation’s IT staff will be in for a hairy few weeks indeed.

Image credit: US Government, Creative Commons

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news Diversified listed IT services group CSG today revealed it had received a takeover offer from an un-named suitor which saw shareholders offered a substantial premium on their current holding in the company.

“CSG announces that it has received a non-binding, indicative and confidential proposal to acquire all of the issued fully-paid ordinary shares of the company by way of an off-market takeover offer,” the company said in a sparsely worded announcement to the Australian Stock Exchange this morning. “The proposed offer price is $1.20 cash per share with no adjustment for the final dividend of $0.03 per share to be paid on 4 October 2011.”

CSG said its board had not yet formed a view on whether to recommend the buyout to its shareholders and recommended they take no action yet. It has advised Macquarie Capital as its financial adviser and DLA Piper Australia as its legal advisor and pans to make a further announcement on the matter “in due course”.

The company is a relatively new player on the Australian Stock Exchange, having listed just four years ago in April 2007, an even which cemented the fortunes of its managing director and chief executive Denis Mackenzie. Headquartered in Darwin, the company provides two main types of technology services – the first being fairly traditional business technology solutions and the second being managed print, voice and data services.

CSG has established a strong foothold in the Northern Territory Government, but has also been making its way into Australia’s other states over the past several years, expanding its headcount to about 1500, raising significant amounts of capital and making acquisitions along the way. It is especially strong in the public sector.

The company is one of a handful of mid-tier IT services firms publicly listed in Australia – among them SMS Management and Technology, UXC, Oakton and ASG – who have enjoyed relatively stable growth over the past few years, surviving the global financial crisis and the implosion of a small number of similar companies (including, for example, Commander, part of which was bought by CSG) along the way.

opinion/analysis
Although there are fairly constant rumours of one kind or another, Australia’s cadre of mid-tier IT services firms have remained quite stable for the past three to four years. Much of the problem appears to have been a lack of suitors. There has been little value evident from mergers of equals in the sector, and larger competitors such as IBM, CSC and HP haven’t demonstrated an appetite for making acquisitions in Australia.

With limited potential for international expansion or rapid growth, private equity firms have likewise not been that interested in IT services firms in Australia – preferring to go after software houses such as MYOB and Mincom.

Perhaps the only major acquirer of IT services firms in Australia over the past few years has been Fujitsu, which picked up Kaz from Telstra, as well as a number of smaller players. An acquisition in the printing sector which CSG is strong in may make sense for Fujitsu – although it could also make sense for a number of other similar companies with proprietary printing assets.

In May 2010, CSG entered an extensive agreement with Canon, in which CSG became a Canon multi-function device (integrated printer) reseller, as well as taking sub-contractor ownership of some 10,500 Canon MFDs located around Australia. It seems unlikely, given how recent this transaction was, that Canon itself could be interested in acquiring CSG – and this arrangement might also make it more complex for a competing manufacturer to acquire the company.

To be honest, I simply have no idea at this point who would be interested in acquiring CSG. However, it will be interesting to see how this one plays out.

Image credit: Vangelis Thomaidis, royalty free

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news Melbourne-based newspaper The Age reported this morning that police had been called in to investigate Victorian Government IT shared services agency CenITex, following an audit that had revealed public servants awarded themselves a contract eventually worth some $1.5 million.

According to the newspaper, which has an extensive article online about the issue, some six contractors and staff have been sacked, and an organisation-wide review ordered of the agency by the State Government. Neither CenITex’s spokesperson nor a spokesperson for the Government immediately returned calls seeking confirmation of The Age’s report. Enquiries to the office of the state’s technology minister and assistant treasurer, Gordon Rich-Phillips, were directed to an alternative contact believed to be within the State Government’s central media enquiries unit.

CenITex was set up in July 2008 from the merger of the previous Shared Services Centre and Information & Technology Services divisions under the Department of Treasury and Finance, and has since rolled in a number of major departments and agencies to use its services, such as the Departments of Human Services (health) and Justice.

However, as with a number of public sector IT shared services initiatives, its establishment has not been without its controversies — including a reported attempt to convert its large contractor base to permanent public sector roles. The organisation was also slapped on the wrist by the state’s auditor in December 2009 for failing to follow best practices in its agency contracts.

The organisation appointed a new chief executive in May this year, with the new appointee, Michael Vanderheide, having left a short-lived role leading the Victorian Police’s IT function to take up the CenITex role. Vanderheide was appointed to the Victoria Police role in 2009 after a lengthy career helping lead the ACT Government’s own shared services efforts.

At the time Vanderheide joined Victoria Police, the organisation was itself reeling from the resignation of his predecessor in November 2008. The executive left Victoria Police under a cloud, with an investigation into its IT department finding 12 months later that it had had a “disregard for proper procurement and contract management”.

There have also been a series of other contract improprieties revealed within the wider Victorian Government over the past several years when it comes to the area of technology. For example, a number of reports have also highlighted probity issues within the Government’s handling of contracts associated with its troubled myki public transport smartcard rollout.

opinion/analysis
There are few things that would surprise me about CenITex any more, but I do have a fair degree of confidence that Michael Vanderheide can eventually get things under control — he seemed quite capable and above board when I interviewed him last year.

Image credit: Dr. Keats, Creative Commons

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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

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Western Australian energy utility Horizon Power has signed a three year ICT managed services contract with Japanese IT services giant Fujitsu, in one of the vendor’s first major deals in the state since opening a new datacentre in the region in late 2010.

Horizon generates and retails electricity across Western Australia’s regional centres, servicing some 42,500 customers across an arae of some 2.3 million square kilometers.

In a statement issued yesterday, Fujitsu said the contract covered end-to-end infrastructure support, including services around Horizon Power’s service desk, change, problem, asset and configuration management, server storage, database and network support, email and Citrix applications support, VoIP telephony support, end-user device support, meeting room technologies and more.

In Fujitsu’s statement, Horizon Power general manager of knowledge and technology James Deacon praised the vendor.

We were looking for an outsourcing partner who not only understood our IT requirements, but also supported our mandate to deliver inter-generational assets to the communities we service,” said Deacon. “The successful partner needed to have a proven service delivery capability and the ability to leverage processes and expertise from a national and global pool of resources, from a local base, allowing Horizon Power to provide greater efficiencies at all of our sites.”

“Right through the competitive selection process, Fujitsu demonstrated its ability to deliver and a willingness to partner with us in an area of great importance to our business, that of Aboriginal employment in WA, across various fields of work. The engagement of Fujitsu’s senior executives throughout the process gave us the confidence that we had selected the right partner to work with.”

The news represents one of the first major deals Fujitsu has signed in the state since the opening of its new WA-based datacentre — with pomp and ceremony including a traditional sake ceremony — in November last year. The facility — which features Commonwealth Bank subsidiary Bankwest as a foundation customer — comprises 8000 square metres of tier three datacentre space, with three main general data halls and three smaller halls for companies requiring dedicated private suites.

Image credit: Fujitsu

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