Revera loses ground in 2021 as Auckland Council seeks savings

Signs of change are all over Auckland Council's 2021 supplier spend report as the council's ICT leaders seek savings.

The council has been on a high-profile campaign to rebalance its books, reducing costs across the board over the last couple of years.

Its ICT function was no exception.

Despite that, the supplier of most of the council's core enterprise software, SAP, increased its earnings from council from $10.8 million in the year to the end of June 2020 to $11.7 million in 2021.

In the process, it became the leading vendor by spending at the council, overtaking infrastructure-as-a-service (IaaS) provider Revera, which earned $8.6 million, well down from $13.5 million in 2020 (see chart below).

SAP and the council conducted an in-depth review and renegotiation of its licence structure in 2015 that delivered $33 million in savings over 10 years.

Late last year, council minutes revealed a further negotiation was under way.

Director of ICT Mark Denvir told Reseller News his ICT team had reduced capital spending and a "good number" of projects had been paused to help reduce costs.

"We were not given a specific target, but we contributed," he said.

On the basis of our analysis, savings among the council’s top ICT suppliers have indeed been achieved, totalling around $4.5 million with spending falling from $51.9 million to $47.5 million.

Cost control efforts included asking vendors to reduce their charges and being more choosy about which vendors were needed, Denvir said.

While cost savings were part of the current SAP talks, so were changes to make it easier to migrate to SAP's S/4 cloud, he said.

Software and hardware reseller Insight Enterprises moved up into third place despite a decline in earnings from the council to $5.5 million from $7.1 million last year.

Datacom, which supplies council with strategic security services, was the fourth largest ICT supplier by revenue, earning $5.4 million, up from $4.1 million in 2020.

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Two vendors fell off this year’s chart, not reaching the $1 million minimum benchmark: Zag, which earned $2.4 million from the council in 2020 and The Laptop Company, which earned $7.9 million.

With COVID-19 related shortages striking parts of the market, New Zealand's biggest council counted itself lucky in having invested in new PCs just before the pandemic.

Reductions in the council's contingent workforce also eased pressure for supply, Denvir said.

It was not all plain sailing, however. Some items the council thought it had secured and which had been confirmed were cancelled days later by one supplier.

Now, a project is under way to "liberate the desktop" through desktop as a service.

"We are not at BYOD quite yet, but we are not far off," Denvir said.

Auckland Council was famously created through the amalgamation of seven district councils and one regional council from 2010 onwards.

Core software was standardised, mainly on SAP, in what proved to be a troublesome and expensive project.

Denvir said that after a long journey, council ICT was now a "pretty efficient IT shop" that knew and understood its costs.