The Queensland government has partnered with global software company Microsoft to move public sector staff to cloud-based technology that will allow employees to access government information across all departments.

The new three-year contract valued at $26.5 million with the global computer corporation is intended to replace previous Labor government’s three-year contract valued at $40.2 million that was executed in December 2009.

The deal represents a serious haircut for the software giant that has been under intense political pressure at the state and federal levels to drop its big-ticket prices for the public sector.

It follows embarrassing revelations made public by the federal Department of Finance that the federal agencies were being charged 50 per cent more for Microsoft software licences than the US and Singapore.

Gouging by software suppliers and systems integrators is clearly on the nose in the sunshine state. The Newman government very publicly banned IBM from getting new government work following the Queensland Health Payroll disaster that cost more than $1 billion and created chaos across state hospitals.

The Queensland government is keen to use the cloud-based technology to replace what it has called “cumbersome” IT services under the previous government that claims delivered “little value for money”.

Hailing the deal as a landmark, the Queensland government is spruiking it as the “first whole-of-government” cloud software contract in Australia that will “provide flexibility” to move between computer and cloud-based software.

This means that for the first time, all government departments can junk their out-dated and incompatible software systems and instead have access to the same technologies, which will allow for better sharing and collaboration.

The deal is also being presented as providing significant financial value for the state government, which has been on a crusade to reduce the headcount and costs of its own public service. It says the new deal is $13.7 million cheaper than the previous one.

Minister for Information Technology Ian Walker clearly has high expectations of the new contact, which he wants in place to help the government reach its ambitious goal of “having the best public service in Australia”.

Mr Walker said access to the “most up-to-date” IT services and “world class innovations” will further boost the services Queenslanders receive.

“We are moving from a government owned and operated model to one that uses world-class solutions to deliver flexibility that drive innovation and transformation,” Mr Walker said.

He said the Microsoft deal was a “great example” of the government continuing to lower costs through “effective partnering” with non-government and industry providers.

“It will improve the government’s capabilities for us to engage with Queenslanders in new and innovative channels and offer more opportunities to local business and industry,” Mr Walker said.

A spokesperson for the Queensland government said that an option to extend this contract (for software assurance only) for one year was executed in December 2012 at a total cost of $8.1 million.

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