Are you implying that the government wants a physical...

Are you implying that the government wants a physical server/hardware to store their confidential info? Could you provide any references for that statement? If a clients wants something, they will pay for it - a company doesn't make a deficit to accommodate the needs of their client. The Australian government have $1.3 billion to splash around - they can have whatever hardware they desire. The 7 entries on the CCSL with a protected classification level are all web/cloud services; I don't understand your comment saying that it means "the organisation wants a bare metal server".....