HMRC’s hunt for hyperscaler to guide £500m datacentre exit undertaking deemed ‘anti-competitive’
HM Income & Customs’ (HMRC’s) £500m tender for a hyperscaler to handle a 10-year datacentre exit and cloud migration undertaking for the federal government tax assortment company is anti-competitive and contradictory, it’s claimed.
With the deadline for these all in favour of collaborating within the tender for the contract developing on Friday 23 Could 2025, the planning discover for the deal is being picked aside by UK cloud market stakeholders.
Of their view, the contract is anti-competitive and exclusionary, given it particularly states that HMRC is courting a hyperscale cloud supplier to ship on its contents.
The last decade-long nature of the deal can also be problematic, given the present geopolitical local weather, it’s additional claimed. “Ten years is a lifetime within the tech trade [and] if we’ve discovered something from the previous few months, it’s how rapidly geopolitical tensions, regulatory expectations and technological capabilities can shift,” Mark Enhance, CEO of Stevenage-based cloud service supplier Civo, advised Laptop Weekly.
“Committing to a single supplier on such a timescale introduces pointless threat, price and dependency, exactly after we must be constructing resilience by diversifying and investing in our sovereign digital capabilities.”
Comparable ideas on the matter had been echoed by Owen Sayers, an enterprise architect with greater than 20 years’ expertise in delivering nationwide policing programs, who stated embarking on a 10-year contract with a single provider doesn’t appear a wise transfer.
“In these changeable and even friable instances, with know-how advancing at an unbelievable charge, and the rising uncertainty across the guidelines of worldwide commerce, this doesn’t appear to be a very agile or sensible factor to do,” he advised Laptop Weekly. “It’s not so way back that authorities recommended contracts of half this size had been twice so long as they need to be – and that was in a way more static and dependable panorama.”
What HMRC wants
As detailed in a planning discover, HMRC wants a hyperscale supplier to handle the migration of the company’s on-premise servers from three Fujitsu datacentres to the cloud, as a part of its Information Centre Exit (DCE) programme of labor.
The anticipated go-live date for the contract is 1 April 2026, and it is because of expire on 31 March 2036.
“The Authority is in search of to nominate a hyperscaler to handle the migration of servers from the present on-premise answer to the hyperscaler’s cloud setting,” the planning discover stated.
“It’s anticipated the appointment can be restricted to a single hyperscaler, however this can be validated throughout the procurement.”
Talking to Laptop Weekly on situation of anonymity, a former authorities IT advisor stated the discover’s wording is problematic from a contest standpoint.
“HMRC is leaving itself extensive open to authorized problem provided that the time period ‘hyperscaler’ is broadly related to the US world cloud gamers,” they stated. “This might delay or halt the procurement, losing taxpayers’ cash within the course of.”
Server stock
The contract discover additionally confirmed that HMRC’s on-premise server stock options applied sciences from all kinds of producers, together with HP, IBM, Pink Hat, SUSE, VMware, Oracle, Microsoft and NetApp.
“Participation on this tender can be restricted to these suppliers who’re able to migrating the in-scope servers and related functions inside the proposed timelines and in a position to present UK-based internet hosting providers during the proposed contract,” the discover added.
“As a result of sensitivity of the info being migrated and subsequently hosted, offshore internet hosting and entry to that knowledge isn’t permissible.”
Stipulating {that a} hyperscaler should be used to ship this undertaking, whereas additionally stating that the chosen provider should maintain HMRC’s knowledge in-country, is contradictory, stated Civo’s Enhance.
“The HMRC tender rightly prohibits offshore knowledge internet hosting or entry – an necessary step in the direction of securing delicate public sector workloads,” he stated. “By structuring the method to favour overseas hyperscalers, lots of which function below geopolitical and legislative circumstances far past the UK’s management, it dangers fully undermining that very precept.”
For instance, Enhance pointed to the information that Microsoft has, in response to US sanctions, blocked e-mail entry to the Worldwide Felony Courtroom’s chief prosecutor, Karim Khan.
“[This has] proven how rapidly political choices made overseas can have an effect on crucial establishments,” he stated. “It’s a reminder that when infrastructure is ruled elsewhere, so is management. In that context, the UK authorities’s actions are more and more troublesome to justify.”
An anti-competitive tender?
Nicky Stewart, senior advisor to pro-cloud market competitors lobbying physique the Open Cloud Coalition, advised Laptop Weekly the planning discover’s wording dangers limiting the pool of suppliers who would possibly think about vying for the deal.
“Authorities tenders must be open to each succesful cloud supplier, together with revolutionary challenger firms,” she stated. “Excluding these challengers narrows selection, drives up costs and concentrates threat. An inclusive, multi-cloud method ensures higher worth, resilience and innovation for public providers.”
HMRC’s checklist of necessities can be far too excessive for UK firms to satisfy, however discovering a hyperscaler that may assure the company’s knowledge won’t ever depart the UK may even be nigh on unattainable, added Sayers.
“Demanding that the profitable bidder should be each a hyperscaler (and thus world in scope), and but on the identical time in a position to ship 100% of the providers regionally goes to be a tall order,” he stated. “No main hyperscaler commits to doing all assist or processing in-country, except [the customer is based in] the US.”
Increasing on this level, Sayers flagged Microsoft, whose cloud applied sciences are a mainstay of Whitehall, as being a hyperscaler who wouldn’t have the ability to meet the phrases of the contract discover.
That is primarily based on the software program large’s earlier admission that it can’t assure the UK sovereignty of information saved with its Azure public cloud.
“If ‘should be within the UK’ is the rule HMRC search to use, then logically, they must disqualify Microsoft [from bidding] up entrance, regardless that, inconveniently, they’re additionally the UK authorities’s most popular hyperscaler,” he stated. “In the event that they don’t, then they’ll create a fairly stable foundation for somebody to cry foul and problem the competitors.”
And problem it they need to, stated Enhance. “Handing a £500m contract to US hyperscalers on a silver platter doesn’t simply undermine the UK’s digital sovereignty; it raises severe questions on compliance with procurement laws designed to make sure truthful and open competitors,” he stated.
“It is a take a look at of the UK’s digital spine,” added Enhance. “If the federal government is severe about supporting homegrown tech and guaranteeing long-term management over crucial infrastructure, its procurement insurance policies should do greater than nod to sovereignty; they need to actively ship on it.”
Laptop Weekly requested HMRC whether or not it could entertain a bid from Microsoft for this contract, however the organisation didn’t immediately reply the query.
In response to the remainder of the factors raised within the article, a spokesperson for HMRC stated: “We observe authorities procurement guidelines when awarding contracts. This consists of guaranteeing bidders meet any pre-qualification standards set and finishing up acceptable due diligence.”
