Westpac outlines data centre consolidation strategy

Bank is currently part way through a four-year migration journey to consolidate nine data centres down to two.

Faced with the challenge of operating nine data centres around Australia, Westpac Group is one year into a four-year program designed to consolidate these numerous facilities into two Sydney-based data centres.

Speaking at BroadGroup’s Data Centre Finance and Investment Forum in Sydney, Westpac Group services enterprise executive Bob McKinnon told delegates that some of its current data centres were not up to standard.

“None of these facilities were close to Tier III and some were close to tears,” he joked.

“We looked at our requirements and decided that we were best served by taking the best one of our facilities, one that was capable of being upgraded to Tier III, and consolidate into two data centres spread across Sydney.”

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However, before starting on the migration journey the bank had to look at costs as, according to McKinnon, the migration could cost “hundreds of millions of dollars” over a period of time.

“The operational risk in moving a data centre is such that these are long term decisions,” he said.

For example, it had to look at a 25-year time-frame because McKinnon pointed out that he had no idea what technology Westpac would be running on or the physical size/footprint of the data centre in the future.

Outsourcing

In order to consolidate its nine data centres into two, Westpac Group turned to Fujitsu for data centre services over 12 months ago.

“From our point of view, choosing who we were going to be relying on for the next 25 years around our data centre was very important,” he said. “It was no good having a partner who couldn’t provide us with a physical solution.”

In addition, the data centre sites were a risk management exercise for the bank around a number of different issues including latency between the two facilities.

“The greater challenge came down to ownership and leasing arrangements in terms of how we get flexibility and maintain control in a facility where we were co-located with other people,” he said.

Property negotiations

Real estate leases were also a factor with the Westpac Group data centre.

“We structured what was a fairly unique legal outcome where while we are the tenant we also have an equitable interest in the property if necessary,” McKinnon said.

“If all things go to custard, we’ll be the person with the spoon and the bowl,” he said.

This was undertaken because he said that the bank did not want to take the risk of inheriting arrangements with other people who are co-located in the same facility.

Moving costs

While McKinnon would not publicly share the total cost of moving nine data centres, which includes facilities run by its subsidiary St George, he did acknowledge that the cost was high because it was moving legacy IT environments.

“A lot of that technology is ageing so we’re using this as a process of refreshing that technology,” he said.

The data centre consolidation and migration is scheduled to take four years. Westpac is one year into the program.

“We’ve taken the opportunity to treat it as a transformation program, not just a migration program," McKinnon said.

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