Taking an unorthodox approach to the problem of public-sector overspending on data center capacity, the U.K. Prime Minister David Cameron's office, called the Cabinet Office, formed a joint venture with a private data center builder and operator, which will provide data center services to government agencies. The Cabinet Office and Ark Data Centers (its JV partner) announced the deal Thursday.
The U.K. government spends more on IT than any other public-sector organization in Europe. Runaway data center costs have been a struggle different governments have tried tackling in different ways. The U.S. executive branch has been pushing agencies to consolidate government data centers since at least 2010. Australian government has taken a similar approach.
The U.K. government’s new deal with Ark is a big departure from what others are doing. The joint venture, called Crown Hosting Data Centres, is aiming at satisfying all government data center needs. The company will “deliver increased efficiency, improved value and transparency of service utilization across all of the public sector,” the announcement read.
As the new company’s CEO Steve Hall explained in a statement, the move will simplify data center selection process for agencies and “drive the unbundling of large legacy contracts.”
“It provides publicly funded, mandated and regulated organizations with a pre-approved contract that leverages the buying power of the whole of government for the fastest, simplest access to secure data center services,” he said.
Its first customers are the Department for Work and Pensions, the Highways Agency, and the Home Office.
The deal amounts to a £700 million contract for Ark, according to a report by The Register. The same report said the Cabinet Office would own 25 percent of the joint venture, and Ark would own the remainder.
Ark has been doing business with government agencies prior to the most recent agreement. It has data center contracts with Ministry of Defense and Ministry of Justice.
The company has two data centers in the U.K. It has been around for 10 years but was “recapitalized” in 2012, when a new senior leadership team came in. Its current CEO is Huw Owen, who was formerly a president at BT.
Ark’s board of directors includes Right Honourable Baroness Manningham-Buller, life peer in the House of Lords and former director general of the Security Service (MI5), and Brian Fitzpatrick, CEO of Vodafone Carrier Services.