Hampshire County Council

Executive Member - Policy and Resources Item 5

14 September 2006

Approach for Commissioning Second Data Centre

Report of the County Treasurer

Contact: Jos Creese ([email protected]), ext 7436

Fiona Ives ([email protected]), ext 7426

1. Summary

1.1 This report sets out the case for moving forward to the next stage for the commissioning of a second Data Centre for the County Council. It seeks member approval to tender for specific work required to underpin the final business case. A final business case will be submitted to the Executive Member for Policy and Resources early in the New Year.

1.2 The report does not commit to a specific solution, but initiates the steps to allow a full business case to be prepared. This assessment is based primarily around the potential for re-commissioning the Babbage House computer centre at Andover which was previously used as the County Council's main computer suite.

1.3 Alternative solutions will also be considered, and a number of issues will be addressed as the business case develops before a final decision to use Babbage House can be taken, eg;

· Re-negotiating the Babbage House lease will be essential, and landlord's agreement to changes;

· Alternatives to using Babbage House for the second Data Centre presented as benchmark comparisons;

· Other potential uses for Babbage House at Andover will need to be resolved. (eg. relocating Libraries Headquarters from the North Wall centre.)

· Refinement of funding requirements for the business case.

1.4 This report largely supports aim 5 of the corporate strategy - `Improving Services'. As the report describes, having more robust arrangement for IT back up and service continuity is essential for improving and extending front line services to the public.

2. Background

2.1 The increasing reliance on County Council technology and systems by the public, partner organisations, staff and Members, along with the lack of IT disaster recovery premises, is currently one of the Council's top risks as identified by the Corporate Risk Management Group. Measurable costs to the County Council of a total Hantsnet systems downtime are estimated to be over £10 million per week. This does not include the cost of potential loss of reputation, impact on other organisations, or the risks of consequential damages should an incident occur which resulted in serious disruption to services. Most large organisations now have dual locations for running IT and it is increasingly unusual to have no such arrangement.

2.2 Highly resilient and highly available IT is now essential for the majority of services. This is impossible to guarantee without a second Data Centre to support parallel running of systems and services and to allow essential systems maintenance without stopping access to those systems. Demands for higher availability of computer systems include (for example and the Contact Centre Programme):

· Flexible and weekend working (eg. Libraries, Contact Centre, Hantsweb);

· Managed services (eg. to public service partners and schools )

· Changing working practices (eg. self service, public reliance on e-services).

2.3 In summary, the need for a second Data Centre to back up the current County Council IT suite in Winchester has become increasingly important to the County Council as the reliance on technology increases. In addition many services are now directly available to the public through Hantsweb, and the County Council is hosting services for other public service organisations. This importance has been highlighted in the Head of IT Services annual report and by members in the 2005 IT Scrutiny review.

3. Options

3.1 Do nothing - this option is not feasible as improvements will be needed to meet the changing Council requirements of IT, as described above.

3.2 Outsource - outsourcing the provision of IT back up services entirely to a third party has been rejected at this stage as initial analysis suggest costs would be disproportionate to the long term requirements of the Council. Low cost `standby' recovery services from the private sector may potentially meet some requirements and be affordable, but would not form a long term solution. However, to aid cost comparison, outsourced costs will be gathered as part of the tender exercise proposed.

3.3 Acquiring a New Site - Initial talks with external IT Data Centre suppliers (IBM and ComputaCenter) indicate that there is no pre-configured Data Centre property available in the Winchester area. However, this option is not ruled out, and IT Services are working with PBRS to look at the possibility of acquiring a new or refurbished site for the second Data Centre. If it proves not possible to commission Babbage House (see below) then this option is the likely option to be recommended. Commissioning any new building for upgrading to a Data Centre could be a long and expensive activity.

3.4 Babbage House - Babbage House at Andover was previously used as the County Council's main computer centre, and the County Council still owns the lease. IT Services have commissioned a building survey of Babbage House from two Data Centre providers (IBM and ComputaCenter). Both companies have confirmed that due to its location, previous use as a Data Centre and lease with the Council, it is likely that Babbage House could provide a cost effective and easy to commission second Data Centre.

3.5 The potential benefits of using Babbage House include;

· The County Council already occupy the building on the basis of a lease, (nb. this expires in 8yrs and would need to be extended and terms renegotiated);

· Proximity to Winchester will minimise people and network costs;

· The technical refurbishment is estimated to be only 3-6 months;

· Reduced cost of refurbishment due to basic internal design still in place from previous use as a Data Centre for Hampshire County Council and Lloyds TSB (but considerable structural, electrical and mechanical work will nonetheless be required);

· Due to the limited availability of existing Data Centres in the Hampshire area, IBM and ComputaCenter have indicated they may wish to enter into a partnership agreement to sell unused Data Centre space to their commercial clients. This suggests others may be interested and could further reduce the cost to the County Council.

3.6 On the downside, Babbage House is in a considerable state of disrepair and neglect after several years of being vacant. It is also uncertain whether or not the building lease could be re-negotiated to allow necessary building works and lease extension, both essential pre-requisites to its re-commissioning. PBRS are discussing this with the current landowner. In the meantime the proposed tendering exercise will look at the cost of Babbage House re-commissioning, and PBRS are searching for alternative sites.

3.7 Babbage House is therefore a preferred option on the basis that if the obstacles can be overcome, it potentially offers the basis of the quickest and lowest cost route to a high quality second Data Centre.

4. Other Factors

4.1 Ideally a second Data Centre would be commissioned in time to act as a staging area to run services during the Ashburton Court refurbishment project. This would help reduce the risk of service disruption caused by the building works (eg. dust and debris affecting air conditioning and cooling systems located at the back of Elizabeth II Court).

4.2 The ability of the County Council to deliver IT services to third parties such as the National Health Service or other Local Authorities (and even in the future, schools) will be restricted over the coming years unless there are the means to provide and to demonstrate a robust IT business continuity facility. This is due in part to the requirements the Civil Contingency Act is placing on the provision of critical IT services, as well as changing expectations of robustness of IT solutions.

4.3 Due to likely resource constraints, it is proposed that the project will be resourced by a third party supplier and managed by IT Services. Resourcing costs will be included as part of the tender.

4.4 The requirement for a second Data Centre represents a significant investment for the Council. IT Services will be seeking to maximise income through a variety of partnership and shared working arrangements with public and private sectors.

4.5 The development of a second computer site will be undertaken in parallel with the Ashburton Court refurbishment project. This will require two separately run projects with independent means of finance and resourcing.

4.6 Data Centres are categorised into four industry standards against which different criteria are expected. These range from the lowest, tier 1, single site with no in built resilience to the highest, tier 4, dual site with inbuilt resilience and high physical security, similar to those used by military organisations. Research with Gartner and the IT industry has shown that a tier 3 build would be required to meet the needs of the County Council and its partners.

5. Financial Implications

5.1 Cost and income streams for the project have been estimated based on discussions with suppliers. The purpose of the tender exercise proposed by this report is to verify these. Early indications are that a Second Data Centre could be self financing over 5 years with no new corporate funding required through a variety of income streams, (see Appendix A). There are inevitably a number of assumptions which have had to be made on this. These include being able to realise the commitment of other local authorities in operating on a shared service basis, securing private sector financing and being confident about the likely costs of the project.

5.2 Plans already underway to minimise costs through the introduction of new technologies and the re-use of existing equipment.

5.3 To gauge interest from external suppliers, IT Services have consulted two suppliers of Data Centre and IT outsourcing. Both companies indicate they would be interested in pursuing options of working with the Council in either a shared or leased agreement by supplying IT to commercial organisations from Babbage House. This could provide ongoing financial support. Both companies are expected to respond to the tender.

5.4 IT Services has also undertaken a detailed piece of work jointly with IBM to scope the infrastructure of a second site. This investigated several technical options from the simple through to the complex and gave indicative costs for each, ranging from £1.5m for the minimum level of required services.

5.5 Like the County Council, many other local authorities face similar demands for increased business IT resilience, especially to meet the requirements of the Civil Contingency Act. IT Services is in active discussion with over a dozen of these authorities whose requirements range from renting Data Centre floor space to use in the event of a disaster to fully managed services run by Hampshire (see Appendix B in the Exempt part of the agenda). The Hampshire and Isle of White partnership have discussed and agreed in principle an approach for shared working, and have shown strong interest in the project, including contributing to costs.

5.6 However, further discussion with local authorities and external Data Centre providers is proving difficult to progress without a specific business proposal, and there is a risk of losing potential income and the most cost effective solution for all parties if this situation continues. This proposed tender will provide a better basis for negotiation. It is also proposed to give the partners who commit to using the facility the chance to influence the proposition and final design.

5.7 Because of the complexity of commissioning a second Data Centre the recommended approach is to issue one tender sub divided into a number of independent schedules. All respondents will be asked to supply costs independently for each schedule in addition to discounts for commissioning multiple schedules, so enabling easy identification of best value for individual pieces of work against the sum of the whole.

5.8 Until this proposed tendering exercise is complete, it is not possible to be more precise about the costs.

5.9 In summary, it is proposed to manage the revenue cost for implementations within the IT Services trading account, with the exact contribution required dependant upon the success or otherwise of partnership arrangements. An outline cost flow statement is attached at Appendix A. No provision has been made for the capital costs of acquiring a new property.

6. Corporate Context

6.1 The procurement of a second Data Centre will help to ensure that the delivery of IT will continue to meet the growing demands of the business of the County Council especially in meeting aim 5 of the corporate strategy - `Improving Services':

· Higher availability of applications and systems;

· Reducing the risk of losing IT due to any major component or environmental failure or disaster scenario affecting the current Data Centre in Elizabeth II Court;

· Supporting changing working practices, e.g. flexible and extended working patterns;

· Meeting the expectations of the Public, extended service hours, and partner organisations.

7. Legal Implications

7.1 The project team will work closely with the legal department during the tendering exercise and report fully on the legal implications when the business case is submitted for members approval.

8. Personnel Implications

8.1 There are no personnel implications for the tendering exercise.

9. Impact Assessment

9.1 The is no Impact Assessment at this stage but will be reported when the business case is submitted for members' approval.

10. Next Steps

10.1 Subject to approval, the next step will be to build a formal business case based on committed income from partnership working and responses to tenders. This will include:

· Building refurbishment and commissioning of a second Data Centre infrastructure (security, electrical, mechanical, etc);

· Purchase of computer and communications hardware;

· Implementation and hand over of system performance and monitoring software;

· Options for `ongoing' partnership working;

· Financing options;

· Project management arrangements.

10.2 The aim is to provide an environment that will conform to industry standards for a `tier 3' Data Centre - so meeting today's business needs, while having the capacity to expand and change with Council requirements.

10.3 A draft timetable for the proposed steps of the project is attached in Appendix C.

11. Conclusion

11.1 To meet both the corporate requirements of the Civil Contingency Act and the increased business and public requirements for extended opening hours and shared services, the Council need to consider commissioning a second Data Centre.

11.2 Work with external Data Centre providers has indicated that Babbage House could be a viable option for housing the Council's second Data Centre. This is due to location, cost and viability of onward selling in partnership with third parties. Issues will need to be resolved prior to taking this forward as a business case. This report proposes a tendering exercise to enable a case to be made for re-commissioning Babbage House or to reject that option on the grounds of technical or financial feasibility.

Recommendation

It is recommended:

1. that a tendering exercise is undertaken as described in the report to re-commission Babbage House;

2. that a business case is brought back on the basis of this in early 2007, with alternatives compared and issues described in this report addressed.

Section 100 D - Local Government Act 1972 - Background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excluded:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

TITLE FILE

None

Appendix A - Estimated Costs and Funding

Appendix C - Draft Timetable