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Finance reveals cloud procurement moves ahead of DTA overhaul

The Department of Finance called for fresh industry input for two of the biggest chunks of the federal governments computing estate ahead of the imminent announcement of a major technology procurement overhaul by the Digital Transformation Agency.

Finance’s AusTender website on Monday released key details of how the government intends to proceed with its future purchasing of Microsoft licensing, releasing a call for bids for whole of government suppliers.

In a separate posting to the procurement site, suppliers have been asked “to provide feedback” to Finance on a draft head agreement for a whole of government business process standards framework that will underpin a government-wide software as a service (SaaS) panel that covers ERP (enterprise resource planning) systems.

A proliferation of disparate, customised and expensive legacy ERP systems — which covers payroll, finance, accounts and payments — has repeatedly been identified as a target for rationalisation and standardisation to produce savings.

Cloud overhaul looms over legacy

The two procurement moves have been widely anticipated for months by the Australian IT industry, which has been pushing Canberra for years to realign government procurement processes so they can sell so-called cloud based products.

There is mutual appeal for the cloud shift because agencies are able to deploy, develop and update cloud-based software far more quickly and cheaply than using in-house infrastructure that must be constantly upgraded as new versions come down the line.

However apprehensions over security stemming from where cloud servers are physically located has proved a persistent concern for agencies and cyber security agencies because of the potential for sensitive government information to be sent offshore where Australian laws may not apply.

Those concerns have created the equivalent of a miniature property boom in local data centres, especially in the Canberra area, as major cloud infrastructure providers buy-up rack space in high powered compute sheds now dotting Canberra’s industrial outskirts.

In June cloud behemoth Amazon Web Services announced it had partnered with data centre provider NEXTDC to have its services hosted locally by physically planting its boxes in Canberra soil.

That move was quickly matched by rival Microsoft, which this month revealed it was creating its own instances of its Azure cloud service specifically for government in the national capital by taking up digs in Canberra Data Centres’ facilities.

An update on the security posture of government cloud is also anticipated next week when Special Adviser to the Prime Minister on Cyber Security, Alastair MacGibbon, delivers a keynote address the Amazon Web Services Public Sector Summit in Canberra on August 30.

Behind the flurry of announcements, the big push to create sufficient local secure cloud real estate has effectively been building for years after the previous Labor government invoked a wholesale moratorium on buying new data centre capacity through Finance’s Gershon Review of technology procurement.

Conducted by renown conservative cost cutter Sir Peter Gershon, the review was widely criticised for missing major disruptive trends that included cloud computing, mobile devices and the explosion in web services.

Industry is now carefully watching to see how the DTA and Assistant Minister for Digital Transformation Angus Taylor address technology purchasing through their own review. An announcement is expected on Wednesday.

Author Bio

Julian Bajkowski

Julian Bajkowski is an award-winning journalist, editor and adviser who specialises in explaining developments in business, technology, policy and finance. Prior to becoming managing editor of The Mandarin, he worked in senior editorial roles at the Australian Financial Review, ACP, IDG and the Intermedia Group, and has been a public policy and corporate affairs adviser at MasterCard.