James Riley
June 28, 2019

AWS gets the red carpet treatment

Procurement

AWS gets the red carpet treatment

Empty headed: Creating a sovereign capability gap in Australian tech

The Australian Government rolled out a red carpet this week for hyper-scale cloud platform provider Amazon Web Services, helpfully launching a standardised whole-of-government agreement to make it easier to spend money with the company.

It’s a familiar volume sourcing arrangement that streamlines the contractual processes, and helps shepherd not only Commonwealth departments and agencies to AWS, but also state and territory departments and agencies, universities and government business entities such as NBN Co and the like.

The newly-appointed Minister for Government Services Stuart Robert was spruiking the arrangement to media on Thursday, hailing the agreement as a win for government and taxpayers, just as his predecessor Michael Keenan had infamously spruiked a whole-of-government arrangement with IBM for all manner of products and services.

Just why any minister would want to cheer-lead the preferential treatment given to a multinational corporation is quite simply a head-scratcher.

Rather than actively promoting the interests of a foreign tech provider, wouldn’t it be great if Australian ministers spent time promoting the interests of Australian providers?

The five-year IBM whole-of-government sourcing arrangement was particularly foul because it gloated about the expected billion-dollar-plus size of the deal, and because it came so hard on the heels of the government’s own ICT procurement edicts of ‘no contracts of more than three years’ duration or 'more than $100 million in value'.

Well the recommendations of that ICT procurement review have clearly slipped down behind the back of the lounge or be hidden under a book or something. Because its recommendations are less than two years old but have dropped out of sight.

AWS came out of the shadows for the celebrations too. Not normally a company that enjoys an open dialogue – preferring to tightly control its messages to government by going direct – it published its own roadmap for everything government must do to make it easier for AWS to sell to them.

Now that government has dutifully complied with the findings from reports-for-hire agency Deloitte Access Economics, AWS has republished it as terribly important evidence – evidence! – of why government had to act.

The difference with AWS is that it is not crazy enough to allow an estimated dollar value to be attached to the arrangement.

At least these central contractual arrangements should make it easy to tally-up precisely how much government spends annually with AWS in future. But don’t hold your breath waiting for this number to be made public.

The Digital Transformation Agency has now authored a series of these streamlined, whole-of-government sourcing arrangements. They are all with multinational companies. Amazon Web Services, SAP, Microsoft, Concur and IBM have all been given preferential treatment, with the added bonus that the arrangements are marketed to departments and agencies at state and federal level by both the central procurement policy-makers (the DTA) and by the minister’s office.

This is not an argument against multinational tech companies and the fine services that they often provide. It is an argument in favour of Australian tech providers. And for government to recognise procurement as an instrument of industrial capacity building – just as it is in the US and elsewhere.

The Australian Government has been long on promise and short on delivery in this regard. By rolling out the red carpet to these companies we are doing ourselves a disservice.

And we are dealing ourselves out of becoming builders in industries of the future, by not adequately underpinning our home-grown tech companies. We consign ourselves as consumers rather than creators.

There is a sovereign capability issue here, and the government has been shockingly absent in supporting and fostering the development of sovereign capability in key areas of information technology through procurement.

And yes, this is zero sum. Each time government makes it easier for a large foreign company to sell a service into government, it makes it harder for a local provider of the same service to sell to government.

Cultural cringe is alive and well in Australia, and in tech it is being institutionalised in government.

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