​Commonwealth procures AU$27m worth of cloud contracts in seven months

As of January this year, the federal government had posted more than AU$27 million worth of procurement described as cloud or cloud computing on AusTender for the 2015-16 financial year.
Written by Asha Barbaschow, Contributor

Within seven months of the 2015-16 financial year, the Australian government publicly tendered for cloud services to the tune of AU$27 million.

According to John Sheridan, the government's chief technology officer, the grand total of cloud-based procurement posted on AusTender in 2014-15 was AU$25 million. Sheridan said that at January this year, the 2015-16 total already surpassed last year's total.

Speaking at Criterion's Implementing an As-a-Service Model conference in Sydney, the CTO said that from 2009 to 2011, there was about AU$100,000 worth of cloud procurement in total.

In 2011-12 there was AU$6 million; it took a massive dive down to about AU$400,000 the next year, and in 2013-14 there was AU$7 million worth of cloud-related contracts tendered for, Sheridan said.

"You can see that the growth is there," Sheridan said. "But you've got to manage the expectations around this to a certain extent.

"We spend about AU$5 billion per year on IT, so spending AU$30 million on cloud computing is only a start -- but it is the sort of thing that builds up over time and I'm expecting to see more of that this year."

Sheridan said that in order to make it easier for government departments and agencies to procure a cloud-based solution provider, the government established a Cloud Services Panel.

"We wanted people to be able to move quickly into buying these things, consuming the services, and moving on," he said.

"We found that the AU$2 million in contracts that were signed up had an average cost of AU$40,000. We knew this wasn't sustainable in the long term and we needed a better mechanism to do that.

"We knew we had to do some pre-qualification to establish the list and allow agencies to work through what it is that they needed to do and compare the services."

Sheridan said that with vendors describing their services in varying ways, it was not the easiest task.

As part of the government's digital strategy, initially led by former prime minister Tony Abbott, the Department of Finance went to tender in September of 2014 for a whole-of-government cloud services panel to provide software, platform, and infrastructure as a service to the government.

The move was made after it was revealed that despite the government spending almost AU$6 billion per year on IT, the total procurement of cloud services by federal agencies since mid-2010 came to just AU$4.7 million.

"The panel aims to offer agencies scalable and flexible cloud services via industry offerings, and do so in a way that reduces the burden on industry," said Sheridan at the time.

To date, the cloud services panel has signed up 100-odd preferred vendors, with the likes of Microsoft, Datacom, IBM, and Macquarie Telecom among the first to get on board.

"We'd signed 55 up in the first two weeks because we had shared with them the contractual arrangements previously and were able to very quickly get them into offering services," Sheridan said. "So far in 2015-16 we've had AU$2.6 million of purchasing off this panel."

"It's not mandatory and people don't have to use it, it's just aimed at making things easier."

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