Exclusive: Westpac's $65m data storage overhaul

Key concession in IBM outsourcing deal revealed.

Westpac signed a $65 million storage services deal with EMC as part of its renegotiation with outsourced supplier IBM, iTnews can reveal.

Under the agreement, EMC is providing leased storage arrays and managed storage services at the bank’s data centres for five years.

Westpac confirmed with iTnews that EMC was engaged to “manage [the bank’s] storage requirements” as “part of a broader IBM contract” but did not wish to comment further.

Neither Westpac nor EMC would confirm the $65 million figure. IBM was also contacted for comment.

The deal with EMC shines further light on the bargaining power Westpac took to the negotiating table late last year, when it re-signed IBM as its primary technology service provider for a further five years for $1.3 billion.

At the time, IBM retained prime responsibility for operating the bank's key infrastructure services, but Westpac said it would take "greater accountability in the design and management of IT services", using other suppliers or solutions where appropriate.

Keeping IT architecture and strategy in-house has enabled Westpac to choose best-of-breed technology partners, while still benefitting from the sizeable resources of IBM.

The bank revealed in 2010 that it was working with VMware, Cisco and EMC to build a proof of concept for a “private cloud”. This week, the bank’s CIO Bob McKinnon told FST Media that the system is still in testing.

Westpac is also the anchor tenant at a new Fujitsu facility in Western Sydney, and plans to abandon IBM's Lotus Notes in favour of a Microsoft Exchange solution hosted by Fujitsu.

Sources close to the deal said that as Westpac’s legacy IBM storage arrays reach end-of-life, they are gradually being decommissioned and replaced with new EMC equipment.

But this hasn't prevented IBM’s staff have being accommodating during the transition, a source said.

McKinnon told FST Media that Westpac and IBM have been looking to “rebuild confidence and trust” since the renegotiation.

“The ongoing success of our relationship is dependent on us continuing to work together in this way,” he said.