Services Australia has announced that they will be spending close to $94 million on extending long-standing licensing and support agreements with VMware for another three years. This new agreement replaces two previous contracts signed between 2021 and 2024, valued at $78 million. Services Australia stated that this contract extension will provide continued software, support, and related services for the agency’s service delivery programs such as Centrelink and Medicare. The agency also mentioned that the new contract consolidates expiring agreements.
There has been speculation about the increase in costs being attributed to VMware‘s recent acquisition by Broadcom for $61 billion. Reports have suggested that Broadcom is raising license fees for VMware renewals as customers transition to a new core-based subscription model. VMware has confirmed that there are pricing issues for some longstanding customers. Services Australia has had an enterprise-wide software licensing agreement with VMware since 2009 and has signed several licensing agreements with the company over the years, with the most recent one being worth $44 million for hardware and software.
Charles McHardie, the Chief Information and Digital Officer at Services Australia, mentioned in a Senate estimate last month that the agency is planning to conduct a comprehensive architecture review later in the year. This review will focus on the major systems in place, including both new and older systems. The results of this review will guide future investments for the agency. The contract extension with VMware is seen as part of the agency’s ongoing effort to maintain and enhance its service delivery programs.
Overall, Services Australia’s decision to extend the licensing and support agreements with VMware showcases their commitment to ensuring the continuity and efficiency of their service delivery programs. Despite the increase in costs, the agency believes that the benefits of the extended contract will outweigh the expenses, especially in terms of software support and related services. The ongoing partnership between Services Australia and VMware highlights the importance of technology and software solutions in delivering essential services to the Australian public.
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