New hardware marketplace to allow SMEs to sell to Australian government

A focus on the smaller players could give them a chance against the existing tech giant-dominated government service delivery model.
Written by Asha Barbaschow, Contributor

The Australian government announced in August last year it was going to be shaking up the way it procures technology services, offering startups and small to medium-sized enterprises (SMEs) a larger portion of Canberra's technology spend.

Making good on the promise, the Digital Transformation Agency (DTA) has announced its intention to launch a new Hardware Marketplace, slated as a place for government to buy products like monitors, tablets, PCs, servers, and technical services from the smaller vendors, in a space usually reserved for the technology heavyweights.

"This flexibility means government can keep up with new technologies as they develop. It also means new startups with a great product to offer can sell it to government faster, instead of waiting a long time for a panel to open for new sellers," the DTA said.

"The marketplace will be a one-stop-shop so government agencies only need to go to one place for computer hardware, instead of the three or more panels which previously covered these products."

The Hardware Marketplace will eventually replace the Hardware and Associated Services panel, Mobile Panel, and the Commercial Off-The-Shelf Software And Hardware Panel, which all currently feature big players such as Dell, Dimension Data, DXC Technologies -- formerly Hewlett-Packard Enterprise (HPE) -- Fujitsu, IBM, Macquarie Telecom, and Telstra.

The new SME-favouring marketplace follows the big end of town being involved in a handful of government IT issues, such as the Australian Bureau of Statistics' (ABS) Census debacle that occurred at the hands of IBM and the outages plaguing the Australian Taxation Office after a "one of a kind" HPE SAN issue.

The DTA has turned to the market for assistance in structuring the Hardware Marketplace, but said its intention is to release categories one-by-one, following consultations. Enterprise storage is the first to go live, in mid-2018.

The Hardware Marketplace will sit alongside the Digital Marketplace, which provides a direct way for startups and smaller tech firms to pitch their ideas to government and is aimed at getting SMEs involved in the public sector's IT spend.

Former Assistant Minister for Cities and Digital Transformation Angus Taylor revealed in November that since August 2016, SMEs have been awarded 75 percent of AU$50 million in technology contracts published on the Digital Marketplace.

Last month, however, during a Joint Committee of Public Accounts and Audit hearing, it was revealed that consultancy giants EY and PwC were classed as SMEs by the Australian government, as a result of multiple subsidiaries or a number of ABNs registered to the parent company.

The definition of an SME is 200 employees or less, Department of Finance First Assistant Secretary of Commercial and Government Services Nicholas Hunt told the joint committee.

He said the ABS is assessing its methodology for determining whether the businesses identified by an ABN in his department's dataset meet that definition, and that the ABS was "working on fixing that" definition of an SME.

Taylor, who last year called the Australian government a "big bureaucratic beast", believes that in order for the government to make good on its promise to undergo a digital transformation, it needs to change the way it procures products and services.

As of November, 487 businesses with less than 200 employees were registered as sellers on the marketplace, and Taylor said it was his intention to target an additional 10 percent market share of the federal government's annual IT spend toward SMEs.

To increase access to government contracts for startups and SMEs, the now minister for Law Enforcement and Cybersecurity said previously he wanted to get rid of "innovation-stifling" service provider panels.

"Panels are a really good example of well-intentioned policy leading to less-than-ideal outcomes," he said in March 2017.

The government forked out AU$6.5 billion on IT last financial year.

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