Local government IT in London was severely hit by the recent revelation that 2e2 Group was entering administration, with some councils having to shell out £40,000 to keep their datacentre operations running for a week.
2e2 offered public and private sector organisations a range of managed services, from datacentre hosting and cloud services to application services for contact centres.
According to Geoff Connell, Newham and Havering IT director, who's been leading the councils' response to the incident, 2e2's slide into administration has been at a great cost to government IT, especially London councils, which occupied a significant portion of 2e2's datacentre and hosting business.
"A number of London boroughs had contracts with 2e2 and they were told they had to pay £40,000 just to keep their datacentres going for another week," Connell said in an interview with V3.
The councils are only now just beginning to recover from the chaos and try to take stock of the incident, Connell explained.
This has seen many councils waking up to the benefits of hosting shared datacentres and data recovery solutions among themselves, he added.
"Many of the boroughs had their core financial processes stored in the datacentre so they really had to think about payment to the 2e2 administrators [otherwise they would not have been able to pay their core suppliers].
"The administrators asked for the payment in the last fortnight. Some boroughs had to pay, while others were able to cancel their contract and get alternative suppliers. It all depended on whether they could easily move suppliers."
Connell said around a third of London councils had been affected by the 2e2 closure, although some more than others.
He said those councils most affected were those who procured their disaster recovery solution with 2e2 as well as their datacentre services.
Rosalie Marshall is the special projects editor and chief reporter at V3. Previously she was a reporter for IT Week and channel editor for online television site LocalGov.tv. Rosalie covers government IT, business applications, IT skills, open source technology and social networks.