AWS Lands HMRC's £473M Deal to Exit Legacy Data Centres
Data Infrastructure / Infrastructure Management | 5 min read
Amazon Web Services (AWS) has been awarded a £472.8 million contract (including VAT) by HM Revenue and Customs (HMRC) to migrate services out of three Fujitsu-managed data centres and onto UK-hosted public cloud infrastructure. The contract runs from April 2026 to April 2033, with an option to extend to April 2036 — making it a deal worth up to ten years of hyperscaler services to one of the UK's most critical government agencies. The award was the sole tender received and assessed, following a competitive flexible procedure under the Procurement Act 2023 in which Oracle, Microsoft, Google, and IBM were originally involved but subsequently withdrew, leaving AWS as the only remaining bidder.
What the Contract Covers
The procurement's formal title — "Procurement for the provision of Hyperscaler Services to enable Data Centre Exit" — describes its core mandate precisely. The objective is to exit all services from three Fujitsu-managed data centres and decommission any remaining infrastructure by June 2028, when the incumbent hosting contract with Fujitsu expires. The technical scope is substantial: the legacy estate runs approximately a dozen operating systems, including HP-UX, IBM AIX, Sun Solaris, VMware ESXi, Windows, and various Linux distributions, alongside storage environments including NetApp ONTAP. Migrating this diversity of legacy infrastructure to UK-based cloud represents one of the most technically complex public sector cloud transitions undertaken in the UK.
Optional services available under the contract extend well beyond the core migration. HMRC can commission AWS for business services transformation, migration of services hosted outside the three in-scope data centres, new cloud service design and implementation, technical debt reduction, data archiving and purging, and application modernisation and optimisation — including cloud-native refactoring, containerisation, and API integration.
How the Field Narrowed to One Bidder
The procurement process began in June 2025 with requests for information sent to five major hyperscalers: AWS, Google, IBM, Microsoft, and Oracle. Oracle and Microsoft withdrew first. AWS, Google, and IBM were provisionally shortlisted. IBM and Google subsequently pulled out, leaving AWS as the sole remaining bidder — a position confirmed in reporting from October 2025. The final award figure of £472.8 million came in slightly below the initial March 2025 estimate of near-£500 million. Because the tender was specifically scoped for hyperscalers, critics have argued that a broader procurement approach could have invited competitive bids from smaller and UK-based technology providers, and that the single-bidder outcome has weakened HMRC's leverage in its relationship with AWS over the life of the contract.
Regulatory and Policy Context
The award arrives in a politically and regulatorily charged context for UK cloud procurement. The Competition and Markets Authority (CMA) has indicated that competition in the cloud market "is not working as well as it could" and that businesses and the public sector may be paying around £500 million more annually for cloud services than they should. The HMRC contract has drawn parliamentary scrutiny, including a question by Conservative MP Julia Lopez about how limited competition is affecting public sector procurement costs. Despite this scrutiny, HMRC's position is that the transition to cloud services is expected to deliver long-term cost savings, support the government's digital transformation objectives, improve operational resilience, and reduce reliance on legacy systems.
Key Takeaways
- • AWS has been awarded a £472.8 million (incl. VAT) contract by HMRC to migrate services from three Fujitsu-managed data centres to UK-hosted cloud infrastructure — running April 2026 to April 2033 with a possible extension to April 2036.
- • The core mandate is to exit all services from the three Fujitsu data centres and decommission all remaining infrastructure by June 2028, migrating a complex legacy estate spanning HP-UX, IBM AIX, Sun Solaris, VMware ESXi, Windows, various Linux distributions, and NetApp ONTAP storage.
- • AWS was the sole bidder: Oracle, Microsoft, Google, and IBM were originally involved in the process but all withdrew, leaving AWS as the only company to submit and receive assessment of a tender — a single-bidder outcome that has attracted significant criticism.
- • Optional services under the contract extend to business services transformation, new cloud service design, technical debt reduction, data archiving, and application modernisation — including cloud-native refactoring, containerisation, and API integration.
- • The award is under scrutiny from the CMA — which estimates UK businesses and public sector pay ~£500M more annually for cloud than they should — and from parliament, where the hyperscaler-only tender scope and single-bidder outcome have raised questions about competition, leverage, and procurement reform.