Hackney Council is boosting its use of Amazon Web Services (AWS) by 8% each year for the next three years to snag at least a 22% discount on AWS services. This decision follows a fresh cloud hosting deal that kicked off on November 1, 2024, after securing approval from the Cabinet Procurement and Insourcing Committee (CPIC) to extend its partnership with AWS. The contract is worth up to £3 million.
A document from July 2024 explains why the CPIC endorsed this three-year contract, valued at £2.95 million. Hackney Council has used AWS since 2019, but the pandemic led to a sharper increase in usage, especially after a significant ransomware attack in October 2020. The attack highlighted the importance of cloud migration; the services already on the cloud remained safe.
Recovery efforts after the cyber attack accelerated the council’s move to the cloud. Today, almost all services run through AWS. The council’s cloud spending has surged from just over £1 million to around £2.85 million, mainly due to costs incurred from recovering data post-attack.
To manage costs, the document states the council is streamlining its cloud systems by shutting down unused services and resizing the remaining resources. Over the past year, cloud usage has stabilized, and the council is actively finding ways to lower operational costs, like minimizing consumption costs and pre-paying for services to secure discounts.
Through the UK government’s One Government Value Agreement (OGVA) 2.0, the council expects to reduce expenses further. This agreement allows them to tap into discounted pricing based on past spending. The first year’s commitment is set at £909,800, increasing each year, totaling £2.95 million over the contract.
With the OGVA 2.0, Hackney Council anticipates at least a 22% discount off AWS’s standard rates, which could lower its overall spend to about £2.3 million over three years. The council plans to maintain an annual usage growth of 8% to keep benefiting from these savings.
When asked about current discounts under the new contract, a council spokesperson declined to provide specific details. Similarly, AWS wasn’t able to clarify if the discount terms mentioned are standard for public sector agreements under OGVA 2.0.
The OGVA 2.0, introduced in December 2023, aims to provide significant financial advantages to public sector IT buyers. However, specifics about discount levels remain largely undisclosed. Notably, the Competition and Markets Authority in the UK is investigating such preferential pricing schemes to see if they hinder competition in the cloud sector.
