Multiple billions up for grabs as UK government launches cloud services tenders

UK government has launched two tenders for cloud services that could jointly see up to £7.5 billion ($9.5 billion) spent under framework agreements.

The Crown Commercial Service, the Cabinet Office's buying arm, has launched the competition for G-Cloud 14 Lots 1-3, a framework deal for cloud hosting available to a wide range of local public sector bodies which could be worth up to £6.5 billion, according to a recently published contract notice.

The contract terms for the eligible authorities – including central government departments, public bodies, and universities – allow for up to 36 months with an optional 12-month extension.

According to the notice, cloud hosting services sold via G-Cloud are cloud platform or infrastructure services for buyers to deploy, manage, and run software, and provision processing, storage, or networking resources.

The contract is due to start in October 2024 to replace G-Cloud 13, which expires in November.

In a separate procurement initiative, the UK government is seeking a tech firm to help public bodies "transition to cloud software or hosting services." This framework could be valued at up to £1 billion.

It includes services such as planning to facilitate customers' migration to cloud software and/or hosting services, and setup and migration services, which involve consolidating and transferring a collection of workloads.

• UK Cabinet Office hits pause on £9M Microsoft deal
• Infosys enjoyed a boom in UK government invoices in 2023
• Billions lost to fraud and error during UK's pandemic spending spree
• Legacy tech shoots down Ministry of Defence's supply chain improvements

In 2022, the Crown Commercial Services attempted to mark the ten-year anniversary of its G-Cloud framework deals. It claimed that aggregating demand for public sector cloud consumption had netted £1.5 billion ($1.9 billion) in benefits for customers. Total spending via the agreement had hit £11.5 billion ($14.5 billion).

It's no surprise who the main beneficiaries have been. In December last year, it was revealed that AWS collected a staggering 76 percent more direct public sector revenue from the UK government in the past financial year.

The cloud infrastructure and hosting titan saw direct sales hit £253 million ($320 million) in fiscal 2022/23, according to figures from public sector spending researcher Tussell.

Framework agreements – which handle some pre-procurement paper pushing, suggest indicative spending, and offer price discounts – are a popular vehicle for UK public sector buyers. Strategic suppliers in the technology sector, for example, won 73 percent of their total contract value via a framework agreement in fiscal 22/23. The Technology Services Framework reached £801 million ($1 billion), Technology Products and Associated Services hit £272 million ($345 million), and G-Cloud allocated £187 million ($237 million). ®