NSW DCS signs AWS megadeal for $57.6m

The NSW Department of Customer Service has entered a $57.6 million deal with Amazon Web Services for infrastructure hosting services over the next three years.

The contract, which began on Wednesday and will run until the end of May 2025, extends the department’s existing relationship with AWS on a cluster-wide basis for the first time.

AWS entered a cloud purchasing arrangement (CPA) with the NSW government in August 2020 for infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) offerings.

Under the CPA, the NSW government procures cloud services from AWS through the federal government’s deal with the hyperscale cloud provider.

The federal deal was recently renewed for another three years at a cost of $174.1 million after the original contract grew tenfold between May 2019 and April 2022, from $39 million to $390 million.

A DCS spokesperson told iTnews the new AWS contract “consolidates previously separate consumptions of AWS” across the department.

Business units include “DCS ICT (including GovConnect), Spatial Services, Government Technology Platform, Data Analytics Centre and Cyber Security NSW business units”.

Service NSW did not rate a mention, despite the agency having moved all of its digital products, including the all too familiar COVID-Safe check-in tool, to operate on AWS late last year.

The spokesperson said the “renewed agreement will provide a substantial saving across the life of the contract due to the benefits provided from using the Commonwealth... agreement with AWS”.

The $57.6 million cost to “host its computer and storage infrastructure in AWS” has been described as “anticipated spend” over three years, according to the department.

Under the latest iteration of the NSW government’s cloud policy, all agencies are now required to “make use of public cloud services as the default”, suggesting this spend could climb higher.

Where public cloud is not suitable, private cloud services through GovDC and can be used by "exception". In the future, agencies will have access to other protected-level co-location services.

The government expects that all agencies will be using public cloud "for a minimum 25 percent of their ICT services" by 2023.

But major IT infrastructure is expected to be largely in the public cloud in future, with one senior mandarin last year suggesting less than five percent of investments will require exemptions.

Other agencies with current AWS contracts include eHealth NSW ($14.1 million over one year), iCare ($32.7 million over four years) and the Department of Education ($2.5 million over four years)

The NSW government has also established CPA arrangements with Microsoft, Google, IBM, Macquarie Telecom and Vault Cloud.