Home Office inks £450m cloud deal with AWS amidst growing scrutiny
Deal comes at a time when Amazon and rival Microsoft face increased scrutiny from the UK competition regulator
The UK's Home Office has finalised a ground-breaking contract with Amazon Web Services (AWS).
The three-year deal, valued at £450,281,369, commenced 1st December and falls under the G-Cloud 13 framework.
The contract, which may not necessarily reach the full amount specified, is set to provide public cloud hosting services to the Home Office. The payments will be distributed over the contract period.
The specifics of the services AWS will offer remain undisclosed, although the substantial sum indicates that AWS's cloud platforms are poised to play a pivotal role in the Home Office's digital initiatives.
This latest agreement follows a series of collaborations between the Home Office and AWS.
In 2020, the two entities entered into a contract valued at £100 million, which is now reaching its expiration.
The latest G-Cloud 13 framework agreement underscores the government's commitment to using cloud technologies to enhance efficiency and scalability across various departments.
This deal comes at a crucial time for AWS, as both Amazon and its rival Microsoft, face increased scrutiny from the UK competition regulator.
Last year, a report from the Centre for International Corporate Tax Accountability and Research (CICTAR) and think tank TaxWatch revealed that AWS has secured UK public sector contracts exceeding £600 million since 2017.
The report also highlighted concerns about tax payments, with AWS allegedly avoiding £84 million in taxes during the same period.
The Home Office has emerged as the largest UK public sector customer of AWS, having paid the cloud giant £225 million between 2017 and 2022, according to the CICTAR report.
The Competition and Markets Authority (CMA) is currently examining the cloud landscape to determine the fairness of the playing field, especially considering the dominance of AWS and Microsoft in recent public sector contracts.
As the cloud market in the UK undergoes scrutiny, the two companies are estimated to control up to 80% of the £7.5 billion local cloud infrastructure market.
The CMA's investigation raises questions about the sustainability of this dominance and how it may impact competition in the rapidly evolving cloud services sector.
Earlier this year, AWS further solidified its presence in the UK public sector by securing a £20.8 million contract with the Department for Environment, Food and Rural Affairs (Defra).
The deal encompassed cloud hosting, "bring-your-own-licence" software management services, and comprehensive support, managed, and professional services, along with training for Defra employees.