Address by The Hon Lindsay Tanner MP
Minister for Finance and Deregulation
Address to Australian Business Foundation,
22 March 2010, Sydney
Good morning, it’s a pleasure to be able to join you all here today.
As you are all probably aware, the Federal Government is currently deep in the Budget process and it actually took a little bit of manoeuvring to get me away from that so that I can join you today.
I am pleased that was possible because I recognise that this is a very important conference for the data centre industry and users alike. I must admit that the opportunity to escape the windowless cabinet room for even part of a prolonged session of Budget meetings was also very appealing.
The finance part of my portfolio is the primary focus of much of the external attention I receive, and at this time of the year, it takes up an increasing amount of my time. But – and I hope that many of you may already recognise this - my responsibility for Government ICT remains very much at the forefront of my, and this Government’s, focus.
It became clear to me when I was first appointed to this role that the Government need to improve the way it employed ICT. That is why, in 2008, I commissioned Sir Peter Gershon to undertake a review of the Australian Government’s use of Information and Communication Technology.
The “Gershon Review” – as it is commonly known – probably needs no introduction to those of you here today.
The recommendations of that review led to a reform program that is improving the effectiveness and efficiency of the Australian Government’s use of ICT. We have been pursuing the agenda of that program vigorously for the last 18 months.
I recognise that these reforms are not always popular with industry but it is about getting the best outcomes for all Australians. More efficient and effective use of ICT will deliver better services to Australians, at lower costs to the taxpayer.
Of course, one of the recommendations made by Sir Peter, and the one of most interest to those of you in this room, is that which he made on the Government’s use of data centres.
The Australian Government is obviously a very large consumer of ICT. Our data centre floor space is approximately 30,000 square metres, equivalent to that of the big four banks combined.
However, unlike the more efficient data centre consumers, the Government's data centre equipment is not centralised. It is spread across Australia; located in not just large enterprise data centres but also cupboards, converted offices, computer and server rooms, and in commercial and in-sourced data centres.
These are primarily older data centres that are reaching the limits of their electricity supply and floor space. With Government demand for data centre ICT equipment rising by more than 30 per cent each year, it was clear that we needed to re-assess how the Government handled its data centre activities.
Sir Peter Gershon recognised this and recommended that the Australian Government develop a whole-of-government data centre strategy. I am pleased to be able to launch that strategy here today.
In developing this strategy, a range of factors had to be taken into account and I just wanted to briefly touch on some of the key considerations that informed this strategy.
The space requirements I have mentioned are obviously one of the most fundamental elements of the strategy, but they need to be considered with other factors.
Geographic factors too had to be taken into account in the formation of this strategy. Issues such as the benefits of free cooling using ambient air temperatures, the relative advantages of centralised versus decentralised designs, and the capacity of the telecommunications network and electricity grid all had to be considered.
Importantly, we needed to consider the environmental impact of our data centre operations. This government is committed to improving the sustainability of all our operations and with the amount of energy data centres consume, it was necessary for a strong focus to be on this area.
And of course, we needed to consider cost factors. The Federal Government currently spends around $850 million annually on data centre services and our demand for such services is only expanding.
In his report Sir Peter foreshadowed that though aggregating the Government’s data centre services future costs totalling $1billion could be avoided. Stepping back into my role as the Government’s resident scrooge, this was a major consideration, but I can assure it was just one part of a much bigger picture.
The Government also commissioned three external reports to inform the development of this strategy. Summaries of these reports; on technology trends; the Australian data centre market place and a demand analysis for data centre services by the Australian Government; are available in the information packs being distributed this morning.
The strategy that I am releasing today will inform the Australian Government’s planning, procurement and management of data centres until 2025. It is a strategy based around the principles of; coordination; efficiency and effectiveness; and sustainability.
The key element of this strategy is that the Australian Government’s data centre requirements will be planned, procured and managed on a coordinated whole-of-government basis. This means that Government agencies will be mandated to apply the data centre strategy and will no longer enter into separate arrangements.
The Government will acquire data centre facilities and services via a whole of government arrangement that are in line with the Commonwealth Procurement Guidelines. A panel of suppliers will be established and it will become mandatory for agencies to utilise this panel as their existing data centre services require replacement.
I will go into more detail about the opportunities for industry as a result of this strategy later.
A coordinated approach to all aspects of the Government’s data centre activities is designed to improve the efficiency and effectiveness of our use of these services. It is also intended to provide industry with clarity on what the Government wants, where and when.
Sharing sites and services will reduce the duplication, inefficiencies and un-necessary costs associated with base infrastructure. As such all agencies will be encouraged to adopt - as soon as is practicable - the modern technologies and practices available.
I mentioned earlier that the Government’s data centre floor space requirements were anticipated to double if we continued to manage them as we are currently. Practices such as consolidation of sites and increased utilisation of servers and storage provide opportunities to reduce those requirements.
In fact, by implementing this strategy we anticipate the Government’s data centre footprint could be significantly reduced. Cost avoidance achieved from this reduction will go a long way to reaching the $1billion figure identified by Sir Peter.
Just as importantly as increasing efficiencies though, is ensuring this approach meets the data centre requirements of the Government.
One of the key areas in which a coordinated approach to managing federal public sector data centre activities will better meet the needs of the Government is in sustainability.
The data centre strategy focuses on both the efficiency of the data centre and of the ICT infrastructure itself. The two are inseparable – when the ICT infrastructure uses less electricity, it generates less heat and thus less electricity is required for cooling.
The government’s data centres generate an estimated 300,000 tonnes of carbon each year. Our goal is to reduce this by at least 40,000 tonnes per year over the next five years.
The strategy requires agencies to measure and report annually on the electricity used by their data centres and their ICT infrastructure. This reporting will be used to drive continual improvements in electricity use.
The strategy makes it clear that the ‘green credentials’ of a data centre site and its infrastructure will be a major consideration in the Government’s future procurement of data centre services.
The strategy I am launching here today sets out the Government’s approach to data centres for the next 15 years. That period is divided into three phases.
In the first five years the Government will:
In the second five years agencies will share solutions and technology to drive further cost avoidance. And in the last five years of this strategy, agencies will adopt new opportunities for cost avoidance that arise from changes in technology, processes or policy.
Of course, of most interest to many of you here today will be our next steps in approaching the market for these services.
The Government has no intentions on housing all its data in one giant data centre. Aside from the practical issues associated with doing that, the impact on industry would be unwelcome.
We want this strategy to encourage competition and innovation within the industry. There will be significant opportunities available to those suppliers that take the extra step to best meet the Government’s requirements.
The Government will release the first approaches to market in the third and fourth quarters of this year. This will be done via AusTender so I encourage any of you interested in being part of the panel to register on the site.
The full details on the Government’s requirements of future data centres will be available in that tender but I to clarify a couple of elements.
First of all, the Government intends to utilise data centre sites both inside and outside the Australian Capital Territory in the future.
Secondly, the minimum level of floor space required will be 500 square metres with a lease length of 10 years, plus optional extensions of up to five years.
I realise that there will be many questions on the exact requirements of the Government and I will do my best to answer them today. After this morning I encourage you to contact the Australian Government Information Office for more information.
I know that many of you here today have been consulted in the process of developing this strategy and I thank you for that participation.
Whilst implementing this strategy is primarily about improving the efficiency and effectiveness of the Government’s data centre activities, we are also aiming to provide industry with more clarity so they can better plan their businesses.
To that end, your input is extremely valuable and further consultation is planned for the middle of this year. These consultations will be announced through AusTender, so again I encourage those interested to register on the site.
This strategy is primarily about improving the efficiency and effectiveness of the Government’s data centre activities.
We want to reduce the cost to taxpayers, minimise our impact on the environment and ensure we have the services.
But we also want to encourage innovation and competition in the data centre industry.
Thank you
-ends-
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