Cloud still not a commodity: Australian Treasury CIO

With enterprise users of services from cloud vendors still needing to do integration work, Australian Treasury CIO Peter Alexander has said turnkey offerings are a misnomer.

Until technology functions as simply as plugging in an electrical cord, it should not be regarded as commodity, according to Australian Treasury CIO Peter Alexander.

"There's very few technologies that I would say -- we got told are commodity, you plug it in and it just works -- it is just not the case in enterprise," Alexander told the Marcus Evans Australian CIO Summit on Tuesday.

"Even from the most robust technology organisations, there is not much that just works."

The Treasury CIO said organisations needed to be aware of using of the cloud only once they are ready for it, and are aware of the integration work they will need to do.

"There is a lot of cloud vendors out there who will tell you they're 'cloud ready', 'they're ready to deliver you a service that is turnkey' -- our experience has been that's not the case in lots of cases," he said.

"Our experience has been almost every engagement we've had with a vendor in the cloud, we've had to do something to enable them to work in our environment, and really like a cloud provider should."

In November last year, the Australian Department of Treasury signed a AU$5.8 million deal with Technology One to shift from an on-premises ERP solution provided by SAP to an ERP living in the cloud.

When it tested the market to find a service provider, besides offending some system integrators who wanted to pitch more of the same products they had always done, Alexander said vendors were not really offering a cloud solution, and some overseas organisations did not offer the same cloud services in Australia that they did in their homelands.

"Almost all the vendors ... they were basically bidding their on-premises software installed into somewhere that wasn't really cloud-ready, this is all the vendors," he said. "Some of them have moved in the last twelve months a long way in that space."

To Alexander, an interesting change has been the shift in development models from waterfall to agile.

"It is really easy to say that you are a going to move into agile; actually doing it is a real challenge," he said.

"We've had some absolute unmitigated disasters, where we've spent a lot of money on a project, to nearly have to throw it away because we've got to the end of it, and we've discovered the team that have done it really didn't have a clue."

The CIO said the blame for this did not reside with the IT team, even though the business area experts would point the finger at them.

"The business area delivered a bunch of requirements and gone through a bunch of sprints to deliver requirements that don't really meet the organisation's business need."

"They've delivered something, and it works, but it doesn't really do the fundamentals of what it was supposed to.

"But we've been through this and we've learnt some lessons around how you do those things and the level of engagement you need, and the people in those teams, and the oversight of the leaders of the business units, and IT to be involved. It is really important about how you do things."

As well as looking after departmental resources, Treasury is also a shared services provider for other government agencies, which when coupled with a move to the cloud, provides an extra layer of difficulty.

"The federal government is moving into shared services, this is a really big push for us, because I know you've probably all seen the one consistent theme of shared services around the world or in Australia, is that they always inevitably fail," Alexander said.

"Shared services, where this is a centralisation of commodity services across multiple organisations, has struggled -- in government particularly its struggled -- and so this has been an interesting challenge."

Upwards of 15 government departments are expected take advantage of the shared service over the next three years, with the Australian Bureau of Statistics slated to implement the solution by mid-2016.

Not long after it signed the deal with Technology One, Treasury signed a deal with Avaya for an SDN upgrade in February, while in December last year, the department inked a AU$2 million deal with Nutanix to shift into a virtual desktop infrastructure environment as a part of a move to replace its ageing fleet of 1,300 PCs that have reached end of life after five years.