TL;DR
The UK tech minister, Liz Kendall, says Whitehall will negotiate additional whole-of-government purchasing agreements following a roughly £9 billion memorandum with Microsoft. Officials intend to use bulk buying across end-user equipment and cloud services to secure better value and address concentration among major suppliers.
What happened
Speaking to the Science, Innovation and Technology Committee, tech minister Liz Kendall said the government will pursue broader, whole-of-government contracts with large suppliers after completing a Strategic Partnership Arrangement with Microsoft. That Memorandum of Understanding is expected to cover about £9 billion of spend over five years — roughly £1.9 billion per year, by government estimates — and officials say it has already pushed down prices, with some departments delaying renewals until the new terms were in place. The department now responsible for digital policy, which houses the Government Digital Service and a Digital Commercial Centre of Excellence, plans to apply the same approach to end-user products such as laptops and to cloud services. Ministers and senior officials also signalled concern about vendor concentration and lock-in from past cloud adoption, and said departments must better align requirements to let central buying power secure improved commercial terms. The government is also tendering its G-Cloud 15 framework, valued at up to £14 billion.
Why it matters
- Consolidated purchasing could lower unit costs for government technology and cloud services across departments.
- Using whole-of-government deals may strengthen negotiating leverage with dominant cloud providers and address concerns about vendor concentration.
- Balancing broad, reusable agreements with departments' technical needs will be crucial to avoid undermining flexibility or creating new lock-in.
- Decisions on frameworks like G-Cloud 15 and the handling of Google and Microsoft ties will shape public-sector cloud procurement for years.
Key facts
- Tech minister Liz Kendall announced plans to negotiate more whole-government agreements after a Strategic Partnership Arrangement with Microsoft.
- The Microsoft memorandum is estimated to involve about £9 billion in spending over five years, approximately £1.9 billion annually.
- Officials reported the Microsoft deal led to lower prices and caused some government customers to delay renewals pending the new agreement.
- The Department for Science, Innovation and Technology now includes the Government Digital Service (GDS) and a Digital Commercial Centre of Excellence (DCCE).
- Officials have expressed concern that previous cloud adoption created risk concentration and vendor lock-in that limited negotiating leverage.
- The government also described a strategic arrangement with Google for Google Cloud, though earlier commentary indicated that arrangement did not necessarily include concrete commercial terms.
- Cabinet Office figures have urged departments to better align their requirements to make central buying more effective.
- The government is tendering the G-Cloud 15 framework, which is valued at up to £14 billion.
What to watch next
- Progress and commercial terms of any further whole-of-government agreements beyond the Microsoft memorandum.
- The outcome of the G-Cloud 15 tender and how its terms address both wide applicability and department-level requirements.
- Whether the strategic arrangement with Google develops into specific commercial commitments or remains a framework for cooperation.
Quick glossary
- Memorandum of Understanding (MoU): A non-binding document that outlines the intentions and broad terms of cooperation between parties, often used to set the framework for later commercial agreements.
- Cloud service provider: A company that offers computing services such as storage, servers, databases, networking, software and analytics over the internet.
- Vendor lock-in: A situation where a customer becomes dependent on a single supplier's products or services, making switching costly or difficult.
- Framework agreement: A procurement structure that sets out terms and conditions under which specific purchases (call-offs) can be made during a defined period.
- Government Digital Service (GDS): A central government unit that develops and maintains digital services and sets digital standards and policy across government (generic definition).
Reader FAQ
How much is the Microsoft deal worth?
The government estimates the Strategic Partnership Arrangement with Microsoft will cover about £9 billion over five years, roughly £1.9 billion per year.
Will the government sign more whole-of-government tech deals?
The tech minister has said the government plans to pursue additional whole-of-government agreements for items including laptops and cloud services.
Is the Google agreement a commercial contract?
Officials have indicated a strategic arrangement with Google exists, but earlier commentary said it did not necessarily include specific commercial terms.
Will these deals eliminate vendor lock-in?
Not confirmed in the source.
PUBLIC SECTOR 21 UK tech minister vows more whole-government megadeals after £9B Microsoft pact Kendall says Whitehall will use bulk buying to squeeze better value from cloud giants Lindsay Clark…
Sources
- UK tech minister vows more whole-government megadeals after £9B Microsoft pact
- UK eyes more tech megadeals after Microsoft pact
- UK tech minister promises more 'megadeals' after £9B …
- UK tech minister vows more whole-government megadeals …
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