Defence reportedly divorces Global Switch over Chinese stake

Defence reportedly divorces Global Switch over Chinese stake

Reports of plans to take back control of classified data stored in Sydney

International datacentre operator Global Switch, appears to have been dealt a blow to its credibility following reports that the Australian Department of Defence has decided to move secret files out of the provider’s facility in Sydney.

The Department has a budget of $200 million to move its data back to a government-owned facility, according to a report from the ABC, which claims that recent Chinese investment in Global Switch triggered the Department’s decision.

The datacentre operator runs two facilities in Sydney, where it holds classified government data. The facilities also hold accreditations from the Australian Signals Directorate (ASD).

In December 2016 Global Switch’s parent company, London-based Aldersgate Investments, sold a 49 per cent share of the company to Chinese consortium Elegant Jubilee for $4 billion.

The ABC said the Government imposed strict new conditions on the company following the deal, which included seeking an assurance that its Australian arm would continue to be 100 per cent owned and operated by Aldersgate Investments.

Global Switch group director Asia-Pacific, Damon Reid, said the company did not discuss individual customers, according to the ABC.

However, Reid did say that the company is essentially a high-quality, technical real estate business.

"We don't provide IT services to customers nor do we have access to customer data," Reid said, according to the ABC.

"Our customers lease space which they fit out with their own secure cages with their own servers. Global Switch operates under the highest levels of security and our shareholders are restricted from physical access to the data centre."

The deal with Global Switch for the storage of Government Data was struck in 2010 and is set to expire in 2020 at which time the Department intends to move all data back into government hands.

Many Government departments - including the Australian Taxation Office (ATO), the Department of Finance and the Department of Defence - have operated on a cloud-first procurement model but the storage of sensitive data has always been a point of concern.

The Federal Government began to shift data to a number of private facilities in 2010, in an outsourcing move it said would save $1 billion over 15 years.

However, that push to save taxpayer dollars has been stifled, at least in part, by the Department’s decision. And it seems the Government is now once bitten, twice shy, with the decision to take back control of the data.

Data storage is just one aspect of the Government’s digital strategy and this decision only applies to classified information, leaving generous room for other digital projects.

The Government continues to use cloud services from a variety of providers and different departments still store data in private facilities.

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