Cloud data storage a 'money saver'
Big savings could be made by switching the public service to cloud-based application software, especially if it was hosted outside New Zealand or Australia.
The dollar savings have been estimated in a paper that will be presented to Cabinet within the month, Internal Affairs Minister Chris Tremain says.
"It is a big number, but the level of savings are quite different depending on whether we store data onshore, within Australasia or further afield," Tremain said. "The economies of scale and the opportunities for innovation improve significantly as you go further offshore."
The public sector spends about $2 billion a year on information technology annually, including several tens of millions on Microsoft software.
Candace Kinser, chief executive of industry body NZICT, said cloud-based software could help the Government reduce capital expenditure on hardware.
Internal Affairs invited computer companies to help it develop a business case for switching all 32 "core" government departments to cloud-based office productivity software in December.
United States analyst Gartner has praised the initiative.
However, a public servant told Fairfax Media in January that he feared the Government might press ahead without understanding all the privacy ramifications, including those of the Patriot Act in the United States which can oblige organisations with a presence in the US to secretly release information to US authorities.
The options are expected to include using Microsoft software hosted in the cloud either in New Zealand or overseas, or a combination of the two, or making more use of Google software hosted overseas.
Tremain said the Government would need to be clear about the security of cloud-based applications and data sovereignty issues before deciding where to go next.
"We need to get consistency across government as to the type of data New Zealanders are comfortable being located overseas and what they would want to see located onshore. The reality is now if you go to most major trading banks, much of their data is stored overseas now, [but] there is a debate to be had there."
Google has been criticised in New Zealand, Australia and Britain for using tax loopholes such as the "double Irish" and "Dutch sandwich" to avoid paying significant tax in those countries.
Tremain did not comment directly on whether that should count against it in any government cloud-computing tender. "What we have primarily focused on is the security of the data and sovereignty concerns. Those will be pre-eminent and I think those concerns are more important than the potential cost savings."
He understood Google did not have a data centre that it could use to host cloud-based applications in Australia and was "certainly not looking for one in New Zealand".
Tremain said switching to cloud-based applications could follow on naturally from the Government's decision to centralise the procurement of computer infrastructure through data centre providers Datacom, IBM and Revera.
He was encouraged by the volume of business conducted in the year to June as a result of those whole-of-government "infrastructure-as-a-service" contracts.
- © Fairfax NZ News
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