The government has teamed up with SMB IT supplier Ark Data Centres to launch a joint venture it hopes will save the public sector cash on its storage costs.
The duo's new business, Crown Hosting Data Centres, will provide public sector bodies with physical space to host their non-cloud-based servers and systems.
At the moment, public bodies sort themselves out and pay separately to either build their own datacentres or to outsource to IT suppliers, but now they will be able to team up to host their data.
The government says the move is the first of its kind and will save up to £105m.
It also claims the communal datacentres will be more eco-friendly because they are equipped with the latest energy-efficient technology.
Crown Hosting Data Centre's first three customers are the Department for Work and Pensions, the Home Office and the Highways Agency's operations unit.
Each body will operate on a pay-as-you-use basis which the government claims avoids the risk of them getting locked into long-term contracts.
Minister for the Cabinet Office Francis Maude said the new business venture makes sense for the public sector.
"As part of this government's long-term economic plan, we're determined to utilise our unique buying power and become a more intelligent customer," he said.
"It doesn't make sense for departments to host their servers in different ways and at different costs, and in the past Whitehall wasn't even sure how many of these centres there were. With this new joint venture, we will save millions and be able to access the necessary commercial and technical skills in the market to create a thriving new business that will deliver better services and allow government to share in its future success."
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