NSW Govt opens datacentres to SaaS vendors



news The New South Wales State Government has invited technology vendors to register their interest in providing cloud computing-based services from its two new datacentres being constructed to consolidate the IT infrastructure needs of its departments and agencies state-wide.

A number of the state’s departments and agencies are currently hosting datacentre infrastructure in dilapidated facilities across Sydney and the rest of the state, often in back-office environments which are not consistent with modern datacentre practice. The state’s datacentre consolidation strategy — which has been under way for a number of years — will see it shift that IT infrastructure into two new, purpose-build datacentre facilities to be built by Metronode in Silverwater in Sydney and Unanderra (on the South Coast).

The state estimates that 250 new jobs will be created across the construction sites on a short-term basis, as well as additional network and ICT-related jobs once the facilities are operational.
New South Wales will maintain exclusive rights to the ICT equipment and exclusive access to the data stored within the facilities, but Metronode will also be able to use the facilities to provide data storage capacity for other, non-NSW Government clients.

Late last month the state issued a memorandum to IT suppliers noting that it was planning to create what it described as a government private marketplace for ICT service provision to be created within the new datacentre capability. “This will include one of the opportunities to provide Government with infrastructure-as-a-service, platform-as-a-service and software-as-a-service,” the state said.

The mechanism which the state will use to allow external IT suppliers to set up shop within its datacentres is that they will need to be registered in its existing ICT Services Scheme of arrangement. In addition to being registered under an appropriate scheme, the state said, parties interested in providing these services from within the State’s data centrecapacity were invited to register details of their commitment to the NSW Government by 15 April 2013.

“Parties will need to sign a sub-licence agreement, which contains key terms and conditions. Permission will be granted to provide services from the facilities subject to the availability of capacity. Applicant entries received prior to 15 April 2013 will be processed before the data centre facilities open but this sub-license process is expected to remain available beyond the opening of the facilities,” the state noted in its document announcing the scheme.

NSW’s new arrangement — where vendors will essentially become tenants of its new custom datacentre capacity for the purpose of serving NSW Government clients only — is believed to be highly unusual in the context of Australian government IT environments.

Typically, in other governments around Australia, the normal approach is that individual departments and agencies will administer their IT infrastructure themselves (or perhaps on a whole of government basis), only allowing vendors in for specific projects. The new model proposed by NSW will see a different style used — where vendors will have some presence in its datacentre environment even if no department or agency is immediately purchasing their products. In this sense, it has the potential reflects a true ‘marketplace’ environment.

In other related moves, in February this year, the New South Wales State Government kicked off two trials of virtual desktop and cloud email services, in a move which could eventually signal a mass migration of some 30,000 government users into the cloud and which represents one of the first concrete steps by the state into the new cloud computing landscape.

The moves — among others — appear to demonstrate further signs that the state 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.

Australia’s public sector has in the past notoriously been averse to purchasing products and services which fall under the cloud computing umbrella. While pure play cloud and software as a service vendors such as Salesforce.com, Google, Amazon Web Services and others have experienced a solid level of success in various aspects of Australia’s private sector with their solutions, the fact that most such services have been hosted offshore has prevented such companies from making strong in-roads into Australian governments at any level — federal, state and local. Similarly, companies such as Microsoft, Oracle and SAP which offer both SaaS and on-premises models have continued to see strong public sector demand for their traditional solutions, with only slow uptake of their SaaS options. However, if the NSW Government has its way, much of this may be about to change.

Wow. The NSW Government is really thinking outside the box here. This is precisely the kind of move which will stimulate cloud and SaaS adoption within its departments and agencies, and there is absolutely no doubt it will push the state both towards cloud as well as towards standardised IT solutions delivered from its own facilities and away from the kind of bespoke solutions which have troubled it in the past. I am blown away that we are seeing this kind of innovative approach in NSW. There are certainly some smart cookies in the NSW State Government working on this one.

Will it be a bit uncomfortable already having vendors in the state’s datacentres? I don’t think so. We’re talking about IT infrastructure being set up, not actual market stalls and pamphlets between the racks. In addition, the NSW Government has no obligation to buy anything here — just that it wants to have the vendor services available if it decided it wants to.


  1. I am not involved in this process so not really across the details, but I don’t understand who pays for the data centre space (including power and all other infrastructure costs). The NSW Govt or the SaaS vendor?

  2. So, they are becoming a provider of space to everyone now, not just government departments?

    What? – No government departments took them up on their offer?

    Maybe they should go back to what they do…

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