The House Appropriations Committee on Articles I, IV, & V met to discuss House budget recommendations on a number of state agencies. This report only covers invited testimony from the Department of Information Resources.
Testimony on DIR begins at 48:26 in the archive of the hearing.
LBB Summary – Department of Information Resources (Link)
- 2018-2019 Recommended: $753,873,746, biennial increase of $82,833,820, 198 FTEs
Department of Information Resources
Stacey Napier, Executive Director
Nick Villalpando, Chief Financial Officer
- HB 1, as currently filed, will allow the Department of Information Resources (DIR) to continue to support the Texas, providing vital information to agency’s across the state.
- The DIR serves a number of functions for the state, including operating the capitol complex phone system, network security services, cyber security services and education/awareness, and the Quality Assurance Team
- The DIR’s increase in requested funds are a result of increase in demand not increase in cost.
- HB 1 will fully fund all of the cost services we provide.
- In the future, we would like to continue to discuss implementing the application portfolio management program not approved in HB 1.
- Increase in Clearing Fund – Appropriated Receipts to expand the application portfolio management (APM) system beyond the current pilot offering to additional agencies.
- Rep. Longoria: The agency’s request includes 2 data centers, are these brick-and-mortar locations?
- S. Napier: Yes, one is in San Angelo and one is in Austin
- Rep. Longoria: All signs point to the future being in the cloud. Do you anticipate reducing them or downsizing the number of brick-and-mortar data centers?
- S. Napier: I agree, the cloud is the future and we utilize that technology in a number of areas like cooperative cloud contracts. That said, I don’t foresee us reducing our data centers as agencies across the state have significant investments in them.
- Rep. Longoria: How does an agency begin to use your services?
- S. Napier: When we were initially founded, 28 agencies were mandated to be included in our data center. We run their day-to-day IT. Other than those 28 agencies, there is no mandate to be in our system. Non-mandated agencies have access to our cooperative cloud contracts.
- Rep. Longoria: What are the big non-mandated agencies?
- S. Napier: The Comptroller’s office and DPS.
- Rep. Longoria: Would you be able to handle them if they were to move over?
- S. Napier: We certainly could; it would take some time, probably several years.
- Rep. Longoria: Regarding Texas.GOV – how much of your funds are spent operating the website for the state?
- S. Napier – we do not operate the website, have outsource contract with Texas NIC which is currently undergoing re-procurement.
- Rep. Longoria – asked about split of revenue – 60% to third party and 40% goes to?
- S. Napier – yes, 40% goes to GR; under current situation none of funds flow through DIR; they have proposed to treat like another one of their services where they pay vendor and oversee contract – but right now about $30 million a year goes back to GR
- N. Villalpando – agency does expend approximately $700k-$1million per year to provide oversight but it can vary from year to year. Cost for operation actual portal – $47-50 million annually.
- Rep. Longoria: Do you anticipate operating the portal yourself in future?
- S. Napier: We do not intend to operate internally but will manage contract on behalf of the state. Hoping to get more competition so there would be a tower that just operates portal, tower that is application development, and tower that is payment processing engine.
- N. Villalpando: It would be treated very similar to existing Enterprise contracts. Enter contract with service providers, collect revenue streams from customers and then remit funds back to vendor. DIR would provide the management and oversight, etc.
- Rep. Longoria: Who is current vendor? Going out for procurement soon?
- S. Napier: Texas NIC
- S. Napier: Yes, June 2017 is RFO target and contract will expire Sept. 2018
- Rep. Longoria: Is there issue with new vendor/contract? Intellectual property?
- S. Napier: Current contract has untangle provisions and good size buffer for program
- S. Napier: Vision is to have more competition, transition will be a busy time
- Rep. Capriglione: Why do we see an increase in cost for technology services in agencies like the TABC if the cost of technology should go down with time (Moore’s Law)?
- S. Napier: The cost per unit is not going up. The increase in total dollars spend is a result of increased consumption.
- Rep. Capriglione: Could you explain your billing process with other state agencies?
- N. Villalpando: We enter into contracts with service providers and then we enter into interagency contracts. Every month we get an enterprise bill from the service providers and then bill the agency. There is a DIR service fee of 2.9%.
- Rep. Capriglione: Data center services are from a third party, not state employees?
- N. Villalpando: Correct.
- Rep. Rose: When big state agencies want to use commercial alternatives to the state data center, they have to submit a waiver, right?
- S. Napier: If they don’t want to use the data center or our hybrid cloud initiative, they would have to apply for an exception.
- Rep. Rose: How many waivers have you all received?
- S. Napier: Maybe 2 or 3 a year.
- Rep. Rose: What agencies have submitted this waiver?
- S. Napier: Primarily Article 2 agencies.
- Rep. Longoria: Ultimately, how do you stream line everything?
- S. Napier: The data center contract was procured 2008 and re-procured in 2012. The next procurement is in 2020. We hope to be fully streamlined by then.
- Rep. Miller: Increased technological appropriations are due to consumption?
- S. Napier: Yes.
- Rep. Miller: I’m going to read a quote from the CEO of Oracle: “80% of corporate data centers are expected to disappear.” What percent of data is in the cloud?
- S. Napier: The state has a lot in the cloud however the majority isn’t yet. It is our hope in the coming years to increase the amount of data stored there.
- Rep. Miller: Maybe sometime in the next years we can have 1 data center?
- S. Napier: I am not sure if we are prepared to commit to that. The good thing about having 2 data centers is that if one goes down, we always have a backup system in play.
- Rep. Capriglione: When we set up the data centers, do we have a refresh every couple of years?
- S. Napier: Our contracts have a refresh cycle of 5 years.