NSW Government signs mega data centre deal

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NSW Government signs mega data centre deal

iTnews gets the skinny on the IT deal of the year.

The NSW Government is on the cusp of signing an historic agreement to become the anchor tenant at two new Metronode data centres to be built in Sydney and on the NSW south coast.

The Leighton Holdings subsidiary will build the Sydney facility, in Silverwater, by mid-2013 as well as a second facility at Unanderra near Wollongong by the end of 2013.

Each facility will offer nine megawatts of capacity.

The complex deal – one of the first of its kind in Australia – will see the NSW Government guaranteed access to up to half the power capacity at both facilities for anywhere between ten and twenty years into the future.

The Government intends to use the data centres to replace 130 server rooms in operation across its departments.

The first tenants to sign on to use the facility are the largest users of IT in the state: NSW Health, the Department of Education and Communities, the Department of Finance and Services and Corrections NSW.

All other agencies will be directed by the Department of Finance and Services to migrate to the new facilities within four years.

A NSW Government spokesperson said the state currently operates “everything from broom closets to whole data centres”.

“It’s not an efficient way to run Government,” the spokesman said.

The new facilities are expected to help the Government consolidate its IT spend and promote economic development in Western Sydney and the Illawarra.

The value of the contract was not disclosed due to Metronode financing the facility build itself.

The facilities

According to documents seen by iTnews, Metronode’s proposed Silverwater data centre will offer nine megawatts of IT load over 5600 square metres of technical floorspace; enough for 2500 racks in 83 self-contained computer rooms and around the same amount of space again for plant.

Metronode has acquired a larger plot of land in Unanderra worth 22,000 square metres to build a second data centre with similar specifications - nine megawatts of power and more than 5600 square metres of plant space with 5300 square metres of server room floor. The facility will handle 2340 racks in 78 computer rooms.

Metronode is basing its next generation of data centres around the country on the BladeRoom modular construction used in its recently completed Melbourne data centre.

A spokeswoman for the company refused to comment on the NSW Government deal, pending an actual contract being signed between the parties.

Head over the page for details on the unprecedented controls the NSW Government gains from its data centre deal.

The NSW Government's tenancy agreement with Metronode more closely resembles a public-private partnership than what is usually on offer from large third party data centres.

The Government has, for example, negotiated not just for floor space but also all aspects of power and cooling, availability, network links, security, and service desk support.

In principle, the NSW Government has committed to using up to nine megawatts of the total 18 megawatts on offer from the two facilities for the next ten years, with two five-year extensions also in the contract.

The Government has calculated that if all NSW agencies, state-owned enterprises and universities jumped on board the data centre reform program, it would currently use around eight megawatts of capacity.

In return for its commitment, the NSW Government has sought substantial control over the operational aspects of the facilities and a flexible approach to paying for the services supplied.

Unique outcomes of the contract include:

Flexible pricing

The NSW Government will buy services from Metronode on a per-kilowatt basis, a relatively new concept in government IT purchasing.

The contract sees the Government initially sign up to only use 3.2 megwatts of power upon completion of the facilities but Metronode has promised to hold at least nine megawatts of capacity across the data centres exclusively for NSW Government use.

The Government as a whole will only pay for what it uses, with guaranteed capacity slightly beyond its current requirements. This will ease pressure on the NSW Department of Finance to force agencies to adhere to its data centre reform package.

The Government has also sought guarantees on the price it pays for power. Metronode has promised a PUE above which agencies won’t have to pay.

Separately, the data centre builder has committed to signing up to the nascent NABERS accreditation for data centres once this standard is finalised.

Further, Metronode has allowed agencies to use the NSW Government’s pre-negotiated power contracts (the C777 contract with EnergyAustralia) to ensure it is enjoying the economies of scale on offer as part of the broader NSW Government.

Locking in power prices and demanding world-class power efficiency will prove a sound option if energy prices continue to escalate in anticipation of the carbon tax.

Guarantees on availability

The two facilities will be linked by an active-active connection, allowing agencies to fail over applications from one data centre to the other in near-real time in the event of a power outage, data corruption or other disaster.

Metronode has also committed to gaining Tier III accreditation from the Uptime Institute for both facilities. This accreditation demands that the facility is ‘concurrently maintainable’ and achieves uptime of 99.982 percent.

The Leightons subsidiairy recently became the second data centre operator to gain initial Tier III design document accreditation for its Melbourne facility.

The service level contracts allow agencies to operate at a level of redundancy usually reserved for banks and retail.


The contract also means NSW Government has unprecedented controls, including first right of refusal, over what other tenants Metronode can supply to from the same facilities to ensure public data and applications are never at risk.

Agencies will have access to web-based monitoring of their infrastructure.

Stay tuned to iTnews for a complete guide to negotiating data centre agreements.

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