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Even Westminster can’t escape the clutches of vendor lock-in in the cloud market.
Internal documents from the UK Cabinet Office’s Central Digital and Data Office (CDDO) state the government’s “current approach to cloud adoption and management across its departments faces several challenges,” The Register recently reported.
Key risks created by this strategy include “risk concentration” and the possibility vendor lock-in will inhibit future efforts to negotiate fair prices for IT services, according to the analysis. The document singles out Amazon Web Services (AWS) and Microsoft Azure in particular, noting they have “existing dominance” in UK government cloud spending.
As one example, The Register noted AWS has already landed deals with the government worth nine figures—with AWS raking in 76% more in contracts in fiscal year 2022/2023 compared to the year prior.
“This path forecasts a future where, within a decade, the public sector could face the end of its ability to negotiate favorable terms, leading to entrenched vendor lock-in and potential regulatory scrutiny from [UK regulator] the Competition and Markets Authority,” the CDDO warned in the document.
Vertically integrated cloud providers have attracted regulatory scrutiny across Europe, including in the UK. Gartner surveys have identified cloud concentration and vendor lock-in as one of the top concerns of CIOs.
Overspending and cloud cost control have also emerged as top priorities as overall spending and cloud capacity surges. Some enterprises have repatriated cloud workloads back to premises, citing waste and lower long-term cost.
“What [some companies] found is that they were getting huge cloud bills,” David Lithincum, former Deloitte chief cloud strategy officer and independent cloud expert, told IT Brew.
“The applications weren’t altered to make them efficient, to use cloud resources, cloud security, serverless computing, scalability, all that kind of stuff,” he added. “The bills were way more than they thought.”
Other issues identified in the CDDO report include the “absence of a standardized approach” on cloud strategy, resulting in everything from an average six-month wait for new cloud services to duplications of and “inconsistencies” in basic cloud architecture.
One unnamed expert who spoke to The Register said AWS contracts had quadrupled, with AWS offering larger discounts for upfront payments in exchange for minimum annual spending commitments which another government would find extremely difficult to terminate.
A government spokesperson told The Register in a statement that Crown Commercial Services (the UK’s top procurement agency) has contracted with the “widest range” of cloud providers, “including 5,000 suppliers on G-Cloud 13, with 91% of them SMEs.”