HMRC hands £473M Fujitsu migration deal to AWS after competition melts away

Steven

HMRC hands £473M Fujitsu migration deal to AWS after competition melts away

Summary

HMRC has awarded Amazon Web Services a £472.8 million (including VAT) contract to migrate services from three Fujitsu-managed datacentres and host them for a minimum of seven years from April 2026, with an option to extend to ten years. AWS was the only tender assessed. The deal is intended to enable HMRC to exit the Fujitsu-run datacentres by June 2028 and includes scope for migration, application modernisation and additional business transformation services. Insiders say several large suppliers withdrew, leaving little room for price negotiation and stoking concerns about hyperscaler dominance in UK public-sector cloud procurement.

Key Points

  • Contract value: £472.8m (including VAT); term: minimum seven years from April 2026, extendable to ten years.
  • AWS was the sole remaining bidder assessed; other major suppliers (Google, IBM and Microsoft) either dropped out or were not in the running.
  • The procurement targets migration from three Fujitsu datacentres running a mix of legacy OSes (HP-UX, AIX, Solaris, etc.) with an eye to exiting those sites by June 2028.
  • Tender scoring was weighted 70% on quality, 20% on price and 10% on social value, limiting government leverage on cost.
  • The award amplifies long-running competition concerns: the CMA has flagged potential market dominance by AWS and Microsoft and estimated higher costs to businesses and the public sector as a result.

Context and relevance

This decision highlights the practical difficulties the UK government faces when procuring very large cloud deals: high entry costs, narrow technical requirements and supplier specialisation can reduce competition and negotiation power. It sits alongside active CMA scrutiny into hyperscaler market share, parliamentary questions about the cost of limited competition, and prior operational concerns after major AWS outages — all of which shape debate on digital sovereignty, taxpayer value and risk management for critical public services.

Why should I read this

Short version: it’s a big, political, and expensive move that affects who runs vital public services and how much it costs the taxpayer. If you care about cloud competition, public-sector tech or the risks of vendor lock-in, this saves you the time of trawling through tender notices and commentary.

Source

Source: https://go.theregister.com/feed/www.theregister.com/2026/03/25/hmrc_fujitsu_contract_aws/