Services Australia has recently agreed to extend its licensing and support agreements with VMware for another three years at a cost of nearly $94 million. This new deal replaces two previous three-year contracts that were signed between 2021 and 2024, with the total value of the agreements being $78 million. The agency stated that the new contract will provide software, support, and related services for its service delivery programs, such as Centrelink and Medicare, while also consolidating expiring contracts.
Questions have been raised about the increased costs of the new contract, with Services Australia being required to pay 20 percent more than before. This increase in costs may be attributed to the recent acquisition of VMware by Broadcom for $61 billion, which has led to reports of price increases on license fees for renewals. VMware has acknowledged that there are pricing issues for some long-standing customers as the company transitions to a new core-based subscription model.
Services Australia, previously known as the Department of Human Services, has held an enterprise-wide software licensing agreement with VMware since at least 2009. The agency has signed multiple licensing agreements with VMware over the years, the most recent of which was valued at $44 million for both hardware and software. Charles McHardie, the chief information and digital officer of Services Australia, indicated during a Senate estimate that the agency plans to conduct a comprehensive architectural review later in the year, focusing on major systems.
McHardie highlighted the need to review both new and existing systems in order to inform future investments by the agency. The architecture review will help determine the path forward for the agency’s technology systems, which include a mix of new and legacy systems. The outcome of this review will guide Services Australia in making strategic decisions about its technology infrastructure in the years to come.
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https://www.itnews.com.au/news/services-australias-VMware-licensing-and-support-hits-94m-609421