Row breaks out over UK gov's "dependence" on AWS

Tory peers question £75m cloud contracts, but experts suggest Amazon is also helping smaller UK firms

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A row has reportedly broken out within the government over cloud computing contracts given to Amazon. 

Around £75 million worth of contracts for web hosting, software and support services were awarded to Amazon Web Services (AWS) last year, according to The Telegraph.

That's reportedly almost double the amount of the next cloud-provider, French firm Capgemini, which was awarded £42 million. This has started to create a divide within the Tory party with some concerned that the government is too dependent on one service.

Speaking at a UKCloud roundtable, Conservative life peer, Lord Holmes, said the tech giant represented  "the latest iteration of the biggest player", adding that in regards to cloud procurement, it was being allowed to "eat the largest piece of pie".

Lord Maude, the former minister for the Cabinet Office, also spoke out about the AWS contracts. 

"When it comes to hosting, we've regressed into allowing a small group, and one vendor, in particular, to dominate," he said, according to The Telegraph. "If you take a view of the government as simply as a customer, it makes absolutely no sense for the government to be overly dependent on one supplier. No one would sensibly do that."

AWS is only directly responsible for less than 1% of what the UK's public sector spends on IT, but it generates around £8.7 billion in economic value. The firm is the biggest global provider by market share and recent research from Canalys suggested it received more business spend in Q3 of 2020 (32%) than its two closest rivals Microsoft (19%) and Google Cloud (7%). 

Some have pointed out that the likes of AWS are actually helping smaller UK businesses to win government contracts. According to Daniel Korski, co-founder of GovTech firm Public, it is actually helping power some of the most exciting and creative businesses in the country.  "It's tempting to set up large US cloud providers against small UK startups," Korski said. "But that totally misses what's actually going on. Major cloud providers are enabling a new generation of British startups to bid for government contracts as they provide a secure platform to deliver services which government trusts. Before them, startups had few chances of offering products to the government."  It is also worth noting that AWS recently signed a Memorandum of Understanding with the government to provide digital skills across the civil service and actually increase the diversity of its suppliers by helping smaller businesses to take part in these types of public sector contract.  The government has also put strategies in place that prevents dependence on one supplier, in the form of a green paper published in December. However, there should also be no "outright protectionism", according to Robert Colvile, director of the Centre for Policy Studies think tank, where gov isn't "buying British purely for the sake of it".  

"When you look at how important cloud computing has been to the rollout of the furlough scheme, or the expansion of Universal Credit, or the NHS's response to the pandemic, it's clear that the priority - as with all our procurement - should be to get the best quality at the best price," he said.

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