IBM banks on strong history for success with AU$1b government contract

Big Blue's VP and CTO of cloud told ZDNet that Australia is punching above its weight in technological adoption, after the federal government announced handing it AU$1 billion to do just that.
Written by Asha Barbaschow, Contributor

The federal government last month announced it had signed a AU$1 billion contract with IBM to provide hardware, software, and cloud-based solutions across all of its departments and agencies.

The five-year, whole-of-government contract, which also includes standing up joint innovation programs in quantum computing, cybersecurity, and research, was touted by Canberra as furthering its digital transformation agenda.

Speaking with ZDNet, global VP and CTO of IBM's Cloud Platform Jason McGee said the new contract is an opportunity to take past learnings and put them into practice in the future.

"IBM has been a partner with the Australian government and many customers because we have a long history together. Because we learn from projects that we do together, we are able to take those experiences and take our technologies and move forward with clients," he said.

"I think we will just focus on what we're trying to accomplish next and we have a long history of being a trustworthy partner and really bringing technologies to help them serve the customer."

The contract was awarded by the Digital Transformation Agency (DTA) despite it being in the middle of a project to spread the AU$6.5 billion spent annually on IT by the Australian government across the smaller players in the space.

While the new billion-dollar arrangement is in contrary to that body of work, it also follows a handful of IT-related bungles that have occurred at the hands of Big Blue in Australia.

According to newly minted local MD David La Rose, the agreement is a "very tangible demonstration" of IBM's partnership with the Australian government and its agencies, having been the vendor of choice for many Commonwealth entities for 40-plus years.

One contract IBM held in the past was the delivery of the 2016 Census.

On August 9, 2016, the Australian Bureau of Statistics (ABS) experienced a series of denial-of-service (DDoS) attacks, suffered a hardware router failure, and baulked at a false positive report of data being exfiltrated, which resulted in the Census website being shut down and citizens unable to complete their online submissions.

The ABS called out IBM for failing to adequately address the risk posed to the Census systems it was under contract to provide, and that IBM should have been able to handle the DDoS attack.

In April 2016, the Queensland government was ordered by the Supreme Court of Brisbane to pay IBM Australia's legal fees stemming from the legal proceedings over the state's troubled health payroll system, which cost taxpayers an estimated AU$1.2 billion.

It was said at the time that the cost of the case was potentially as high as AU$3 million.

The state government originally settled with IBM in early 2011 over the debacle, in exchange for IBM fixing the system; however, former premier Campbell Newman announced in December 2014 that the state was taking legal action against the tech giant instead.

IBM also has contracts with a handful of the country's large banks, with Westpac last month announcing it had implemented a new offsite hybrid cloud, built and operated by IBM.

Praising Westpac for its innovation in moving banking workloads to the cloud, McGee said customers in Australia are certainly keeping pace with their global peers, and in a number of cases are actually leading when it comes to cloud adoption.

"Bendigo and Adelaide Bank -- they've been really innovative in adopting some of these newer technologies like containers as a way to drive innovation within their organisation," McGee explained.

"While Australia may be small in the grand scheme of things, it kind of punches above its weight in its adoption of these technologies and leverage them as a way to change their businesses."

It is expected all government agencies will have access to the tech under the billion-dollar agreement; however for the agencies that already have extensive money invested with IBM -- the Department of Human Services, the Australian Taxation Office, the Department of Home Affairs, and the Department of Defence -- IBM said the agreement "improves the current arrangements and gives them the autonomy and flexibility to change the profile of their technology over the next five years".


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