NSW govt to gain upper hand on cloud providers

The NSW government's datacentre-based cloud market could start up a potential feeding frenzy among government agencies and cloud providers. But will cloud providers be the predators or the prey?

With around 68 providers signed on to provide services in the NSW government's new datacentre-based private cloud marketplace, the question has emerged of who stands to benefit the most: Government departments and agencies, or cloud providers.

For cloud broker AC3 — one of the first three organisations to take up residence in the marketplace — it may well be the providers, and not agencies and departments, that will find themselves encircled and scooped up like so many sardines.

"I have been in this industry for a long time, and this is the first time I have seen where it is not so much a vendor-centric environment or marketplace," AC3 CEO Monique McIntosh told ZDNet.

"Within government, it is being driven completely by what the customer wants, which is brilliant."

In large part, this new customer-oriented approach is being driven by the immense buying power of not only major departments like Health and Education, but also tens of smaller agencies all moving into the government's two new state-of-the-art datacentres at Silverwater, Sydney, and Unanderra, south of Sydney.

That ability to leverage buying power in a consolidated environment is also enabling agencies to dictate favourable terms, and eliminate the scourge of IT procurement: Vendor lock-in.

"Vendor lock-in is becoming increasingly unattractive to most organisations," McIntosh said. "For [AC3] as an organisation, [we] don't want to be locked in to any particular vendor. What it really comes down to [is] 'am I getting value for money?'"

While government agencies will likely be the ones dictating terms to cloud providers, McIntosh said that the government's cloud marketplace will work — as long as vendors focus on the departments and agencies they serve.

"It has a very sustainable model, provided that cloud providers are able to keep up with the way in which customers want to be able to acquire the services," she said.

As for AC3, McIntosh said that in increasingly focusing on cloud broking, rather than managed services, the company is able to stay above the inevitable feeding frenzy within the NSW government's datacentre marketplace.

"We are very fortunate," she said. "Because we are part of government family already, we aren't going to get into all of that... We try to remain very impartial and make sure we use our experience in government compliance, risk management, and our understanding of managed services so we can get the best deal for governments.

"We are not so much into driving email as a service or SAP — that's not what we do. We look for opportunities where we can make a difference to citizens on the street."