Business Editor for the NZ Herald

Govt in $2b shake-up of data systems

Minister for Communications and Information Technology Steven Joyce. Photo / Brett Phibbs
Minister for Communications and Information Technology Steven Joyce. Photo / Brett Phibbs

The Government is looking to overhaul its information and communication technology (ICT) systems in a shake-up by tender worth $2 billion.

The change would also introduce a new model called the Infrastructure as a Service model (a type of cloud computing), where the oversight of a network and the storage of data is outsourced to a third party. Under this plan, rather than owning servers and managing the network itself, the Government would pay only for the services it uses and needs.

Minister for Communications and Information Technology Steven Joyce said the move would stop duplication and save taxpayer money.

" ICT is a $2 billion spend for the Government, and any savings or efficiencies this move creates will make a real difference down the track. We want to ensure that taxpayer money is invested wisely and that we get value for money," Joyce said late last year.

Nine government agencies are currently committing to the change, including Inland Revenue, the Department of Internal Affairs and the Ministry of Economic Development.

The Government released a tender for the ICT systems on December 22, with proposals due back from interested companies by February 21. The Government hopes the service will be in operation by July.

Once it is up and running, the Government would be one of the first in the world to adopt an Infrastructure as a Service model.

"What this Government's doing is actually quite leading edge," said Microsoft NZ chief executive Paul Muckleston.

"[It's] one of only a couple globally at the moment who are actually doing infrastructure as a service, and that is going to be quite interesting because it represents an opportunity to provide better services to the [public]," he said.

The New Zealand Information and Communication Technology Group said the tender had caused a stir amongst the country's leading technology companies.

"I can say there is a massive amount of interest - this will be one of the biggest opportunities in the New Zealand market in 2011," said NZICT group chief executive Brett O'Riley.

The tender has caught the eye of companies such as IBM, Hewlett-Packard, Dell and Cisco.

He said it was likely a number of companies would collaborate and put forward a joint proposal.

As well as work to stimulate growth in the ICT industry, O'Riley believes the overhaul would lead to much-needed investment in Wellington data centres - sites which house information servers accessed via the internet.

"They're talking about these deals being 10-year deals. That's the kind of commitment that's going to get investors excited because typically to get the return on a big piece of capital investment like a data centre, you're looking at a return window of at least five years for most investors and banks," he said.

O'Riley said the Government tender had stringent requirements for security of the data stored in these centres.

The minister responsible for implementing the changes, Nathan Guy, said, "Broadly speaking, the security issues are no different from those already faced by agencies.

"As part of the procurement process they [applicants] will have to demonstrate how they'll meet the security standards required."

Tomorrow: Which region has the best broadband.

- NZ Herald

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