B.C. hatches $100-million deal with EAS and Q9

Q9 Networks Inc. will build and operate a new data centre in Kamloops, BC as part of a 15-year data centre service agreement with EDS Advanced Solutions (EAS) Inc., a subsidiary of EDS Canada Inc.

Valued at over $100 million, the agreement will also provide EAS with capacity in Q9’s new Calgary data centre scheduled to open this summer.

EAS will use the two Q9 data centre facilities to support a separate 12-year contract valued at approximately $586 million between EAS and the British Columbia Ministry of Labour and Citizens’ Services.

Under this latter agreement, EAS will be responsible for consolidating, standardizing and managing computing, information storage and data centre operations across the province.

Q9’s data centres will house the provincial servers and mainframes, but EAS will manage the services in those data centres, explained Al Hurd, vice-president of EDS Canada.

EAS outsourced to Q9 because the province wanted their primary data centre to be located in B.C. “We as EDS or HP didn’t have a facility in B.C. and the requirements of the province didn’t warrant the construction of a whole data centre,” said Hurd.

But Q9 felt the workload would give them enough critical mass to warrant building a data centre here, Hurd continued. “That’s the business they are in … it worked out very well for both of us,” he said.

EAS has no connections to the U.S.A. Patriot Act, which eliminates several privacy concerns.

“EDS Advanced Solutions was set up in late 2004 as a separate entity from EDS Canada for a couple reasons,” said Hurd. “One, it was a unionized operation; second, to provide a layer of insulation from these foreign disclosure orders.”

“The concerns of the province were the U.S.A. Patriot Act and foreign disclosure of any kind. They wanted to make sure whoever was delivering the services wouldn’t be in a position to have to comply with those kinds of orders,” Hurd explained.

“There was some concern that an American company might be subject to the act,” said Rob Duffus, communications director for the B.C. Ministry of Labour and Citizens’ Services.

But as a fully Canadian company based in Vancouver, EAS is subject to B.C. laws. “British Columbia has some of the most stringent privacy legislation in Canada,” noted Hurd.

“EDS Advanced Solutions is a British Columbia company and all the data will be stored in Canada. The company is subject to British Columbia privacy legislation, which has specific provisions around the Patriot Act,” said Duffus.

The contract affects approximately 120 government staff positions, according to the Ministry, but every one of the employees affected have been offered employment by EAS.

“Employees who have accepted offers from EAS remain members of the B.C. Government and Service Employees’ Union, and will receive the same or higher pay and benefits. Employees who opted not to transfer to EAS have chosen one of several options, including remaining with government for placement in other positions,” states the Ministry’s news release.

Effects on the Kamloops community include new jobs in construction and IT.

“These are typically large projects which will create local jobs by way of construction and as well as for operating the data centre,” said Osama Arafat, CEO of Q9 Networks. “We expect to hire IT staff to operate the data centre on a 24/7 basis.”

While the primary objective of the Kamloops facility is to serve EDS and the provincial government, the new data centre is also “strategically positioned” to achieve a few things for Q9 customers, Arafat pointed out.

“It’s going to act as a disaster recovery business continuity data centre for some of our existing customers in Calgary as well as new customers in the Vancouver or lower mainland area, so it basically expands our footprint and gives our customers an additional option for diversity,” he said.

Q9 currently operates two data centres in Calgary, with a third under construction. The Toronto-based data centre services provider also operates facilities in Toronto and Brampton.