Inside the government’s data centre transformation

In April 2008, the Australian government engaged Sir Peter Gershon to lead an independent review of its use and management of ICT. At the time, the government was spending $870 million per year on outsourced and insourced data centres.

The review suggested that if the government didn’t change its data centre arrangements over the next 10 to 15 years, it would incur an additional $1 billion in costs, according to John Sheridan, the Australian government’s chief technology officer.

Two years later, the government created a new data centre strategy and set up a panel for data centre facilities, which now covers 20 sites across Australia with a minimum of 500 square metres of data centre space.

Sheridan told attendees at CIO’s ‘Tomorrow-Ready CIO’ event in March, that since the panel was established, the government has signed more than $300 million worth of data centre contracts and avoided $24 million worth of costs.

Server virtualization is becoming increasingly popular across government departments with a virtual/physical server ratio across all agencies of about 3:1 – a doubling in the number of virtual servers over the past four years.

“That shows that there is a lot of work going on in government already about building the sort of things that you anticipate in the cloud computing area,” says Sheridan.

He says there is a demand in government agencies – particularly the 60 smaller departments that spend less than $2 million per year on IT – to be more efficient in what they are doing and get value for their IT services.

Six agencies spend 81 per cent of the $5.2 billion in annual federal government IT spend. A further 60 agencies spend less than $2 million per year on IT.

“Clearly there is a demand for looking at work in IT that isn’t in the multi-million dollar area. What we are looking at is a new paradigm of buying IT in these smaller arrangements,” says Sheridan.

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A cloud computing future?

According to Sheridan, cloud computing is simply a different way of buying IT services and there “isn’t any particular magic in the technology.”

“Indeed we have used the technology in our datacentres for some considerable time,” he says.

“My thesis is that cloud is a method of procuring IT and the primary guideline in procurement is value for money, and I think that agencies should use cloud when it provides value for money and not when it doesn’t,” says Sheridan.

“It’s as simple as that – I don’t think it’s [cloud] that special, it’s just a different way of buying IT and some of these things can be fad-like in the way that they progress.

“I think when I was doing the Gov 2.0 work two years ago, people would often say that this was going to change everything immediately and I would just ask them how their Second Life presence was going,” he says.

Sheridan adds that federal government agencies need to remember that there are “hype cycles” in IT and purchasing technology products and services that offer value for money is most important.

“I don’t have a view as to how much cloud there should be – just that there should be more value for money… there are relatively few federal government agencies using cloud infrastructure at the moment,” he says.

“Again I don’t think that’s a bad thing – if they are getting value for money depending on where they are in their IT cycle of IT infrastructure and what opportunities they have – we shouldn’t pursue cloud or indeed any other IT on a theological basis.”

Automation with datacentre-as-a-service

In 2012, the federal government released its datacentre-as-a-service multi-use list, established to provide agencies with a simply way to by cloud and cloud-like services under $80,000 for less than 12 months. According to Sheridan, the federal government will soon look at brokering cloud services worth more than $80,000 for more than 12 months.

Sheridan says these types of smaller agreements are not necessarily suitable for all agencies and the government has “learned some lessons along the way.”

According to Sheridan, the requirement for suppliers to describe their security arrangements – even for unclassified systems – and the location of a data centre; and the need for a certain level of accreditation required under ITSM rules, slows down the deployment of a system built using datacentre-as-a-service.

I don’t have a view as to how much cloud there should be – just that there should be more value for money… there are relatively few federal government agencies using cloud infrastructure at the moment.John Sheridan, CTO, Australian Government

However, he says since the multi-use list was introduced, services can be “ready the next morning” after they are ordered, compared to a week or a month previously.

“This is the change that we can get out of cloud – turnaround times are reduced significantly – how long it takes us to get to market and deliver smaller services – things that the business needs immediately rather than having something that might drag over time.”

Sheridan said this presents an opportunity for government agencies to get cheaper, faster, targeted services in a way that was previously possible.

“What we know of course is that [agencies] want services like this and because they are so cheap and they can buy them [using] their government credit card, we’ve got an explosion in IT,” he says.

“It’s interesting if you’ve been in government for a long time to look at the [change] in the cycle of IT work.”