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10.7 Cloud Computing

The purchase, maintenance and upgrade of Information and Communication Technology (ICT) is expensive, particularly given the rapid pace of change. As a consequence, a global trend is developing for organisations to move away from owning and operating all ICT assets to more cost effective cloud computing models.

Cloud computing is a way of leasing computing services over a network. It allows costs to be shared across users, with rapid scalability on demand and fast access to new computing applications and systems as they become available.

Public cloud computing offers the greatest savings by amortising costs over millions of users globally. It can produce significant savings in the total cost of ownership, estimated at estimated 20 to 30 per cent of infrastructure costs. Private cloud facilities are more expensive but offer benefits such as increased security.

The emergence of cloud-based technology offers the potential for better efficiency and service standards across government. Savings are available across all three typical cloud service offerings: software, platform and infrastructure.

The Commonwealth Government has been slow to adopt cloud computing. A reliance on bespoke, legacy systems, concerns about the security and privacy of placing public data in the cloud, and general risk aversion all impede progress.

In accordance with the approach being adopted outside of government, for example in the banking sector, the Commission considers that a ‘cloud first’ policy, particularly for low risk, generic ICT services should be clearly articulated and enforced by the Government. Over three to five years, this could progressively reduce ICT costs as cloud computing becomes the default option.

In order to make it easier for departments to source cloud services with confidence, the Commission proposes the Department of Finance establish a whole of government cloud computing provider panel to confirm the viability, capability and costs of large-scale cloud computing providers. Agencies could then obtain quotes for such services as the need arises.

Competition should be maintained in the market for cloud providers by adding new vendors and services as they become viable. This would also allow government to establish standards for such services. The range of offerings in such a panel would allow agencies to procure public or private cloud computing services, with appropriate levels of security.

Recommendation 63: Cloud computing

Cloud computing is a way of leasing computing services over a network. It can reduce costs by sharing them across users. The Commission recommends that the Government increase its adoption of cloud computing by:

  1. introducing a mandatory 'cloud first' policy for all low risk, generic information and communication technology services; and
  2. establishing a whole-of-government cloud computing provider panel.