SAP invests in new Aussie facility to target critical infrastructure deals

“Nearly 60 per cent of our customers operate under some form of industry regulation around data ... or have some need for supply chain assurance,” SAP Australian president Damien Bueno told The Australian Financial Review.

“We see that increasingly being a requirement as organisations move more and more of what they do to the cloud.

“So we expect this not to be a set-and-forget capability, but an evolutionary capability. We will bring more services over time into the sovereign cloud capabilities.”

Mr Bueno said Australia was one of the first markets where SAP is offering its sovereign cloud capability.

“From an SAP standpoint, Australia is one of the most mature and progressed cloud markets globally,” he said.

“We’ve got over 70 people in the market unit with clearances, we’ve got facilities that we’ve built specifically to do this, which require certification, we’ve got software specifically that’s hardened to meet requirements of legislation, like the Critical Infrastructure Act.

“We’ve invested in the sovereign cloud capabilities ahead of anybody telling us we should because we feel we play a critical role in the architecture of business and in the delivery of government and its responsibilities.”

Mr Bueno said the COVID-19 pandemic had highlighted the difference in tech capability between some parts of the public service and the commercial sector.

Whereas large e-commerce players were able to rapidly spin up large sites to meet the sudden increase in demand, by using highly scalable cloud-based software services, the public sector could not be as agile.

“Many [government] organisations run very old technologies ... and have so many moving parts ... that make it difficult for them to respond in the way that other organisations do,” he said.

Government gains

He said it can take agencies which can’t use already certified cloud services months to negotiate the regulatory environment, and that by the time procurement is completed it is two years later and the opportunity to serve citizens better is missed.

Mr Bueno said some big gains for government agencies came from being able to interoperate seamlessly by adopting common standards and processes.

This comes as the lack of easy interoperability has frustrated the rapid provision of wraparound services for citizens impacted by the last three years of floods, fires and the pandemic.

“We see the cloud as enabling productivity in the way that it’s managed, but also in the capabilities that unleashes and makes available to organisations and to their customers,” Mr Bueno said.

Mr Bueno said the adoption of hardened cloud-based software provided an inbuilt upgrade road map for agencies.

“Even when customers solve this [regulatory] problem …they need to ensure that they have capacities inside of their organisation when the policies change or circumstances to do that. And that’s not something that organisations have historically been good at.”

He said there were three broad groups that needed to access certified sovereign cloud applications.

These are customers that have legislative and policy obligations to secure sensitive data and processes; strategic customers that are bound by increasing critical infrastructure requirements; and customers needing supply chain assurance.

The hardened SAP applications will be offered in partnership with large cloud hyperscalers such as Amazon Web Services, Google Cloud Platform and Microsoft Azure, and marks a pullback from the company’s foray into the infrastructure business.

“We’ve realised that we shouldn’t be in the data centre business. And we have progressively got out of that, and we’ve embraced global partnerships with the major hyperscalers,” Mr Bueno said.

“In Australia, the major hyperscalers have all met the hosting frameworks of Home Affairs, we inherit those characteristics when we apply our software as a service and our cloud services on top of their environment.

“Rather than creating it all our own, we leverage off what already exists that we can take advantage of, and that’s why the hyperscalers for us are important,” Mr Bueno said.