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DWP shows savings from ‘pay as you use’ cloud

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The Department for Work and Pensions (DWP) has claimed significant savings in its digital transformation from a ‘pay as you use’ model for cloud services.

The case has been highlighted by the Crown Commercial Service as result of its memorandum of understanding with Hewlett Packard Enterprise (HPE).

It said the department has used the company’s Greenlake infrastructure-as-a-service model for compute and storage in response to three priorities: creating greater flexibility and capacity when demands on infrastructure increasing; giving itself more financial flexibility; and reducing technical debt.

DWP modelled its server and storage requirements, comparing the costs associated with a traditional capital expenditure model or outright ownership to that of a consumption based ‘pay as you use’ model. It estimated that five years this would produce savings of over £7 million, or 40%, for the relevant functions.

It also identified benefits in increasing its flexibility to react quickly to business needs as it did not have to own physical infrastructure or pay upfront for capacity that may not be used, by moving to a more flexible operational expenditure and reducing its technical debt.

The latter is particularly important when networking, cloud or IT infrastructure is owned outright and incurs heavy costs in maintenance and updating software. The new model ensures that hardware, software and services are all up to date and available without delays.

Evergreen capacity

Bryan Nelson, hybrid hosting transformation lead at DWP Digital, said: "Digital is really important to help reduce costs by introducing automation. Underlying hosting platforms like Greenlake are able to spin all of that up quickly and make it evergreen so you don’t end up with technical debt at the operating level, so we are always able to upgrade our software.

“That is one of the biggest things that this kind of model and technology helps.”

The move from capex to opex has also made it possible to recover VAT payments under the ISFR 16 international financial reporting standard for leasing, which can provide a further 20% saving.

DWP has also identified a long term benefit for the public in being able to do more with digital technology without the restrictions associated with public cloud or traditional infrastructure deployment.

Doing things quickly

Nelson added: “For DWP Digital, this means when we need to do things digitally to help our citizens, we are not held back by technical debt, unplanned capital expenditure or capacity or capability constraints, meaning we can continue to help some of the most vulnerable people in society. 

“With the latest software development and applications they all use the latest technology and they offer many new business features. Some of those features are restricted or will not work if your underlying platform is not up to date.

“The other benefit is capacity. DWP Digital is able to do things quicker, faster and at the right level because DWP Digital strategy is a consumption model. This will save the taxpayer money. DWP Digital only pays for what is used.”

Chris Burnett, sales leader for central government, defence and national security at HPE, said it worked with the department to ‘right size’ the platform and ensure it was not over-provisioned.

“HPE worked with the customer to understand the forecasted future use of the environment so that DWP Digital has a minimal physical hardware footprint, and only pays for what they use,” he said.

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