The Department of Defence has been advised to consider cloud computing as it moves to cut costs and rationalise its data processing environment.
In a newly released report "Initial Scoping Study of Defence Data Centre Service Delivery", PricewaterhouseCoopers consultants recommended that Defence opt for a "physical private cloud".
The report was provided to Defence in September 2010 to inform the department's Centralised Processing Project plans. It was issued to potential suppliers for the project this month.
Report authors recommended that Defence consolidate its central and regional services and data centres to support a more integrated enterprise services model.
This would reorient Defence to a more strategic IT “command and control” role, while integrators, service providers and other third parties managed various service delivery components under "more advantageous outsourcing contracts".
Citing case studies from its clients in the banking, telecommunications and resources sectors, PricewaterhouseCoopers expected Defence to opt for a private cloud that was custom-developed to meet the department's requirements of sovereignty, security, resilience, recoverability and survivability.
“This may be designed, built operated and maintained by the Cloud Enterprise Services Providers (CESPs). But may be specified, and owned by Defence,” authors noted.
While observing that cloud computing offered a “compelling value proposition”, report authors were concerned about the ownership of intellectual property and how clients might move off a cloud.
“What does the client own and what obligation does the CESP have to provide data and specifications enabling another cloud CESP to transform and load the data for residence within his cloud?" they wrote.
"The potential problem is untested but getting off a cloud may be difficult."
Why Defence is unable to deliver capacity on demand
Deficiencies in Defence’s current IT service delivery model seemed of even greater concern to the PricewaterhouseCoopers team.
Existing service level agreements and a lack of explicitly defined business-level outcomes had resulted in architecture, facilities and services that were "clearly not to Defence standards", the study found.
Report authors concluded that the current state of Defence's IT systems management could be “simply characterised by an inability to deliver capacity on demand”.
This was attributed to Defence’s project-orientated delivery model which failed to forecast resource needs or promote planning.
The study also highlighted differences in how central and regional services were delivered and an “inability to standardise and/or coordinate and manage these activities”.
The Defence Computing Bureau focused on delivering services centrally, while regions relied heavily on contracted service providers Unisys and Fujitsu.
Further, Defence’s monitoring tools were not integrated and their use was not standardised, the report found, warning that its Deakin Data Centre Migration (DCM) Project may consequently fail to realise consolidation objectives.
Single supplier to meet savings and service demand
PricewaterhouseCoopers expected Defence’s technology consumption to move from being asset-based to being services- or cloud-based.
Additionally, report authors said a significant amount of “workforce transformation” would be required to enable new business and ICT organisation structures to be implemented.
The report estimated total Defence centralised processing baseline costs for the nine-year period to FY2019/20 were estimated to be between $1.586 billion and $1.877 billion.
Based on PricewaterhouseCoopers' models, Defence may save between $180 million and $499 million by implementing PwC's centralised processing recommendations.
Defence was in the first of two procurement stages for its Centralised Processing Project.
It planned to shortlist up to six prime bidders by the second quarter of 2012 with a single prime being appointed by the second quarter of 2013 and the rollout to be completed by 2019.