Vic Dept tenders for major cloud solution



news The Victorian Department of Business and Innovation has gone to market for a major Infrastructure as a Service (IaaS) solution, in a move that comes on the back of a successful Software as a Service deployment at the department and signals its plans to become a leader in the state government in the cloud computing arena.

The department’s mission is to support pro-business policies within the state as well as developing innovative industries, including the technology sector. It includes sub-divisions such as Tourism Victoria and a wide variety of other functions under its umbrella.

In a recently published request for tender document, the department noted that it was currently seeking an IaaS solution for what it described as its pre-production environment. The environment currently consists of development, testing, training and staging platforms for around 100 virtual servers, 149 virtual CPUs and a total of 480GB of RAM and around 18 terabytes of storage space. The department’s pre-production environment is almost wholly virtualised, with only two percent of available services made up of physical servers holding databases — and the department is planning to migrate even that two percent to virtualised environments as it takes up the IaaS solution it is seeking.

It appears as though the department is currently hosting those services with Victorian Government IT shared services agency CenITex. “The Department, at the time of issuing this RFT, advises that it does not intend to replace its current server hosting provider (CenITex) for other services. It is, however, a requirement that Tenderer’s confirm that they are positioned to expand upon the service to incorporate new services, including production services,” it wrote in its tender documents.

The department noted in its tender documents that the following software would be deployed into the IaaS environment when it was provisioned: Red Hat, Windows Server, SQL Server 2000/05/08, Apache, MYSQL, Windows IIS, Linux, PostgresSQL, Lotus Notes mail, Notes DB and IBM Websphere. Later in the document, the department added a range of other platforms to its list. It also sought pricing for those products from the interested IaaS providers.

As is commonly required with Australian government departments, the department noted that it had strict data sovereignty requirements.

“The Department expressly requires that the geographical location of the IaaS Solution is to be fully contained within Australian territory,” it wrote. “In light of the importance of guaranteeing the integrity and security of Government information, if the Tenderer is internationally based, please confirm your approach to the guidelines set down by the U.S. Patriot Act or any other nations mandatory legislation.”

The department isn’t going into the IaaS deployment blind. For starters, it is known to have been an early adopter (for a government agency) of’s customer relationship management platform from 2007. Analyst firm Ovum has published a detailed case study of the implementation, available from its web site.

Secondly, the department has also conducted a trial of an IaaS solution to get a grip on the technology. Its tender documents state: “In 2012, the Department undertook over a 3 month period, a non-binding arrangement with an IaaS vendor to perform a proof of concept with a number of the Department’s development services. The purpose of the Proof of Concept was solely to test the viability of a start to finish provisioning and normalised operations of an IaaS solution. The goals of the completed Proof of Concept were to ascertain and understand the workings of the IaaS technology, the people needs as well as the process requirements, and determine the overall strategic fit of an IaaS solution for the Department as a viable or non-viable service.”

The news comes as government departments and agencies around Australia are increasingly turning to cloud computing as an alternative to traditional software deployment models. Earlier this month, for example, the Tasmanian Government flagged plans to overhaul its dated whole of government human resources and payroll systems, in a move which will affect some 28,000 employees and may see the state shift its systems into a cloud computing/software as a service model.

In early December last year, in another example, the New South Wales Government added to early signs that it is moving to adopt the kind of ‘cloud-first’ IT procurement strategy which jurisdictions such as the United States, United Kingdom and New Zealand have pursued over the past several years, in a move which could fundamentally change the way the state buys and uses technology.

And earlier in 2012, several major New South Wales Government agencies, the Department of Trade and Investment and Transport for NSW unveiled major and wide-ranging plans to imminently purchase Software as a Service-style IT solutions, detailing the new interest in the cloud computing paradigm through tender initiatives kicked off at the time.

One of those tender initiatives has already resulted in a major cloud computing deal. In July, German software giant SAP won a substantial deal with the the Department of Trade and Investment which it described as its biggest deployment of its Business ByDesign software as a service suite globally, and its first cloud platform win in the local public sector. The $14.5 million deal will see SAP deploy a cloud-based ERP platform to the department, consolidating many other legacy systems onto the one centralised platform along the way.

Transport for NSW (which was formed from the merger of the NSW RTA, maritime, transport construction authority and Country Rail groups) was also talking to the industry in May about SaaS packages. The tender documents have gone offline, but an article by details the fact that in March, the agency went to the market with a proposal to abandon in-house infrastructure and migrate 35,000 email accounts, 25,000 desktop environments and some 2,000 BlackBerry devices to new systems, all labelled “as a service”. ZDNet quoted Transport NSW’s tender documents as follows: “The group CIO is actively promoting a strategy of ‘as a service’, recognising the potential for leveraging the economies of scale and expertise of the private sector in the delivery of core technology platforms and capabilities to government.”

In a separate briefing in October, NSW Finance Minister Greg Pearce noted that the state was developing a new cloud computing strategy, including talking to IT vendors about the development of a dedicated private cloud platform which could be used by departments and agencies across the NSW public sector. In Queensland, the state’s new LNP administration has publicly canvassed the idea of shifting its failed whole of government email consolidation project into the cloud.

I’ve just got a couple of points to add here. Firstly, as mentioned many times on Delimiter over the past few months, cloud computing is now going mainstream in Australian governments at all levels, although most departments and agencies remain tightly focused on maintaining data in Australian datacentres. We’ll see more and more of these IaaS, SaaS and PaaS deployments over the next several years in Australian departments and agencies.

Secondly, I find it highly fascinating that DBI is seeking to migrate its IaaS infrastructure off CenITex (if that is indeed what it is doing, it appears so) and onto an external IaaS vendor. CenITex is itself an IT shared services provider; providing this kind of IaaS solution to Victorian Government agencies should be a no-brainer for it; you’d imagine that creating a state government shared private cloud facility would be something an IT shared services agency like CenITex would be good at. Of course, everyone and his dog knows that CenITex has a boatload of problems right now. It appears DBI doesn’t have that much faith in its IaaS capabilities.

Image credit: rggoldie, Creative Commons


  1. One issue with CenITeX is with the pricing model it uses. It cannot compete with an external vendor on price.

    Disk storage is close to 300% above the cloud and Server Hosting charges are even worse

    Monopolies never work to the advantage of clients .

  2. Good roundup Renai … DBI are going into this with their eyes open in a very considered way based on experience of the actual benefits of cloud services.

    Regarding cloud services vs. CenITex, as I have been saying for years “cloudy is as cloudy does”. The big difference with cloud services is that they (by definition) already exist as mature and proven service offerings in a competitive market. The market disciplines them to be (a) good and (b) competitively priced – and also leaves power and choice in the hands of consuming agency executives. Sub-scale in-house IT shops and Internal shared services in a closed socialist economy can seldom achieve the sharp edge that cloud services in a globally competitive digital economy can achieve.

    The challenge for agencies is simply to learn how to safely buy and manage cloud services for appropriate applications and workloads … and the only way to do this is with hands-on experience. DBI is on the right track because they have 5 years of learning about cloud services under their belt and are making sensible, pragmatic, choices.

    The challenge for CenITex is to take advantage of the competitive efficiency and flexibility of cloud services itself before its customer agencies take matters entirely into their own hands and jump directly into the market. There is still a value-add for the Government if CenITex can be re-positioned as a service broker/contract aggregator/service integrator free from the constraints of its current inherited hodge-podge portfolio of infrastructure, software and people assets (which, after all, used to belong to the agencies until not very long ago …) Cloud services will be CenITex’s salvation if they play their cards right … and agencies give them a chance.

    It will still be better to try and value the aggregation that CenITex has achieved in some practical way rather than to simply thow the baby out with the bathwater (as has happened in WA) and devolve commodity infrastructure and application services decision making back out autonomously to agencies again.

Comments are closed.