ATO handed $151M for new data storage and resilience tech

ATO handed $151M for new data storage and resilience tech

Additional funding over the next three years

Credit: ATO

At least a few hefty new government data storage and IT resilience services contracts may soon be up for grabs, with the Australian Taxation Office (ATO) being handed nearly $151 million for such technology to underpin its security system.  

The funding injection was outlined in the federal government’s latest Mid-Year Economic and Fiscal Outlook (MYEFO) for 2019-20, released on 16 December. The MYEFO document outlined additional funding in the government’s Treasury portfolio.

Included in the additional funding tally was a pledge of $150.8 million over three years from 2019-20 to the ATO to “improve its data storage and resilience of its security system”. As part of this, the Department of Finance will receive funding of $500,000 for assurance reviews, the document stated. 

The ATO’s additional data storage and resilience funding is part of a broader funding initiative worth $213.2 million over four years, from 2019-20, for the Department of the  Treasury and agencies in the Treasury portfolio.

"The government provided the ATO with $70 million in Budget 2019 and additional funding of $150.4 million over three years from 2019-20 to 2021-22," an ATO spokesperson told sister publication Computerworld Australia. "This funding has been provided to assist the ATO uplift its hosting capability and ICT infrastructure to support the growing digital workload supporting Australian businesses and tax payers.

"The funding provided will be used for a number of activities which include reviewing its current hosting providers, increasing cyber security and sourcing new infrastructure and software to manage ATO’s data holdings," the spokesperson added.

The new ATO tech funding comes roughly three years after the ATO was hit by an “unprecedented” failure of its storage hardware, an event that ultimately resulted in a settlement between the hardware’s vendor, Hewlett Packard Enterprise (HPE) and the Australian tax collector. 

In December 2016, the agency's 3PAR storage area network (SAN) hardware, which had been upgraded in November 2015 by HPE, failed, resulting in widespread outages among many of the ATO’s systems, with continuing outages in the following weeks and months as the system was switched out for a newer one.

HP’s Enterprise Services business, which undertook the ATO’s SAN work, was spun out of HPE in early 2017 and merged with fellow integrator, CSC, in April of that year as part of a deal worth around US$8.5 billion that resulted in the creation of DXC Technology.

A year after the SAN incident, in December 2017, the ATO said it would boost its long-running centralised computing contract with DXC Technology to $1.47 billion, with the amended deal running until 2019, as it eyes up incoming procurement changes.

There is of course no suggestion that the new funding is in any way related to the previous SAN failure or linked to existing contractual arrangements between the ATO and DXC Technology.

It remains to be seen which vendors, partners or integrators, if any, will pick up new contracts associated with the $151 million funding injection. However, it is likely that much of the cash injection will be passed onto external partners via procurement contracts.

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