ASX-listed IT services provider All on Anittel Group has signed an new agreement to provide Infrastructure-as a-Service to the Tasmanian Government.

The agreement, which has an initial term of two years with two subsequent one year optional extensions, will enable the government to operate a utility-based managed virtual infrastructure model as opposed to the traditional hardware/software ownership model.

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The contract value will depend on the take up of the service by individual government agencies and follows the major major telephony and communications contract that was awarded to Anittel last year . The contract was awarded through a competitive tender.

Under the contract, Anittel will provide units of computing power and storage. The virtualised data centre platform will enable Government agencies to purchase units in alignment with their fluctuating demands, rather than acquiring individual computing systems that are designed to accommodate peak capacity. Consequently the IaaS can potentially lead to significant financial and operating efficiencies.

Anittel expects demand for the new computing system to grow substantially over the contract term.

Anittel managing director and executive chairman, Peter Kazacos said the contract supported the company's strategy around transforming to a cloud and hosted service provider.

"We believe that there is tremendous scope to drive significant long term recurring revenues around this contract," he said.

"Further it provides an excellent model that we plan to leverage in other locations."

Anittel Tasmanian manager, Karen Murfett said it would create further employment opportunities in Tasmania.

"It is particularly pleasing to see our long relationship as a provider to the Tasmanian Government extend further around innovative technologies and computing models."