Centrelink inks enterprise VMware deal

James Riley
Monday, 07 September 2009 15:57

IT Policy - Government Tech Policy

After years of buying virtualisation specialist VMware’s products and services piecemeal, social services super-agency Centrelink has signed a three-year enterprise licensing deal with the company worth a base load return of more than $3 million.

The contract for $3.1 million was signed in the first half of the year, and covers just software licensing. Considerable services work is expected to be derived as software is added and changes to the Centrelink technology environment are implemented.

Centrelink is a long time VMware customer, but has acquired software and services on a project basis through VMware Australia or one of its Canberra-based service providers.

Under the new VMware Software Enterprise Agreement, Centrelink has signed direct with the Ireland-based VMware International, pocketing the savings in GST and bulk margins.

VMware Australia-New Zealand managing director Paul Harapin would not comment specifically on the Centrelink arrangement, but said its recent focus on government markets was paying off.

The public sector is the only vertical market where VMware has set up its own dedicated sales team. Harapin says the company’s market penetration among large State and Federal departments and agencies matches its success with large publicly-listed companies – where VMware has sold to 94 of the ASX top 100.

“State and federal government is the only vertical market we have,” Harapin told iTWire.

“But that’s more about their buying cycle and the way that they do business – that’s why we set up a vertical for them. Generally any large organisation is going to benefit from (our) software.”

Centrelink is known to be reviewing its longer-term technology strategies, seeking the savings that would come from a less complex technology future.

But in the immediate future, the agency is dealing with near-critical data centre capacity constraints. The VMware deal isn’t considered an answer to medium term capacity issues, but may take some of the heat out of the issue in enabling performance gains without adding to the capacity strain.

Last month, Centrelink announced it had signed an urgent, two-year contract with Canberra Data Centres to use its Hume facility.

Although the federal government is nearing the completion of a Gershon-inspired review of its data centre strategies, Centrelink said it could not afford to wait – such is the urgency of its data centre capacity issues.