AWS signs three contracts worth £894m with UK government for cloud services on single day

Amazon Web Services (AWS) is poised to generate more revenue from three government contracts that went live in December 2023 than it has earned in its decade-long involvement with the G-Cloud procurement framework. These contracts, which include a £350m deal with HM Revenue and Customs, a £94m agreement with the Department for Work and Pensions (DWP), and a £450m contract with the Home Office, were signed under the second iteration of the One Government Value Agreement (OGVA) within the G-Cloud framework. Collectively valued at £894m, these contracts exceed AWS’s previous sales of £757.7m through its participation in G-Cloud. The contracts have raised concerns as they were awarded shortly after the go-live date of the £1.35bn Cloud Compute 2 (CC2) framework. The larger value of these contracts compared to their predecessors and the government’s dependence on AWS cloud services have also been highlighted. HMRC and the DWP are among Amazon’s top three public sector customers, and the new contracts represent renewals under the OGVA. HMRC’s spend with AWS is expected to increase nearly fourfold, while the DWP’s expenditure is set to nearly double. HMRC attributes the increase to its cloud-first strategy, enabling greater operational resilience and flexibility. The UK Competition and Markets Authority (CMA) is currently investigating AWS, including the discounts offered under the OGVA, which it regards as a potential antitrust concern. Former head of ICT in the UK Cabinet Office, Nicky Stewart, predicts that other government departments will renew contracts with AWS to take advantage of the OGVA terms. There are concerns that these contracts may not be in the long-term best interests of the government and taxpayers, but it remains to be seen if the CMA will renew its own OGVA contract with AWS.

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