Australian Tax Office CIO Bill Gibson believes that with the days of one-vendor-fits-all type outsourcing now over, long-running rivals will be forced to enter marriages of convenience if they are to get a share of the government dollar.
The Australian Tax Office is preparing to put the last and largest of its IT outsourcing contracts centralised computing up for grabs, worth around AU$160 million per year. This is EDS's last chance to retain work with the ATO and possibly its first bid since its proposed acquisition by HP.
Government continues to shun colossal outsourcing contracts in favour of selective sourcing, while businesses display growing confidence in software-as-a-service -- however sustained skills shortages have plagued deployments, sparking interest in offshore options.
Observers predict that Hewlett-Packard's acquisition of global outsourcer EDS for US$13.9 billion this week will bring a boost to the Australian integrated services market, but also warn the new Australian entity that its rivals will try to take advantage of the transition here.
Unwieldy IT procurement has led to widespread duplication, according to the new finance minister, Lindsay Tanner. However questions remain over whether greater centralisation will lead to actual savings on the AU$6 billion the government spends on IT each year.
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