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Metronode wins contract to build NSW data centres – but who will do the rest?

by Paris Cowan •
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Metronode will not necessarily be the only supplier to benefit from confirmation that the NSW Government will go ahead with plans to consolidate all of its data centres into two purpose built facilities.

The subsidiary of Leighton Group was today named as the winner of a marathon tendering process that has been underway since an approach to market took place back in October 2009.

It will build two data centres, one in Silverwater in Sydney’s west, and another in Unanderra.

According to the deal, Metronode will retain ownership of the facilities themselves, while the State will retain exclusive rights over the IT equipment housed in the centres.

A spokesperson for the Department of Finance and Services (DFS) said it would be up to agencies to decide whether they kept the management of this infrastructure in-house (i.e. within the relevant shared service cluster arrangement) or outsource to a third party supplier.

The latter option aligns with the recently released NSW ICT Strategy, in which the Government takes a pro-outsourcing stance that could well influence what option agencies decide to pursue.

With construction on the data centres due to be completed by the end of 2013, if agencies choose to avail themselves of migration services demand is likely to hit the market by mid 2013, as agencies begin to transition from the 130 different data centres currently in use. 

IT News has reported that NSW Health, the Department of Education and Communities (DEC), the Department of Finance and Services and Corrective Services will be the first agencies to make switch.

NSW agencies have the option of turning to the Federal Government’s Data Centre Migration panel to source these services once they reach this stage, however Intermediumhas yet to see any inter-jurisdiction panel sharing take place in the ICT market to date.  Another option would be to use the current 2020 IT Services State Contract, although it does not specify data centre migration within its scope.

Federal Government examples are also indicative of what NSW data centre migration contracts might be worth. The Australian Securities and Investments Commission (ASIC), a small agency of just under 2,000 staff, but with significant data requirements, signed a data centre migration contract with Hewlett-Packard for $294,000. At the larger end of the spectrum, the Department of Defence signed a $40 million contract with Accenture to migrate its data from its Deakin facility to a new Tier III facility run by Global Switch in Sydney.

The migration to new facilities in NSW is also likely to happen at a faster pace than the Federal Government’s consolidation under its own Data Centre Strategy, as demand has been building up since the process commenced in 2009.  Unlike their Federal counterparts, NSW agencies reaching data centre capacity have not had an interim procurement arrangement to satisfy pent up needs.

Agencies will be required to transition to one of the new data centres unless they can successfully present a business case for alternative arrangements.

A contract value is yet to be released, as Metronode will privately fund the construction of the facility itself, with the assurance that Government leases will be forthcoming once it is complete.

The NSW Government will buy services from Metronode on a per-kilowatt basis, according to IT News, in alignment with the push towards pay-per-use provisioning in the ICT Strategy.


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  • NSW
  • IT Services
  • Treasury
  • Corrective services
  • DEC
  • DFS
  • Leighton Contractors
  • metronode
  • NSW Data Centre Strategy
  • NSW Health
  • Whole-of-Governemnt Data Centre Migration Panel
  • Data Centres