Britain’s Public Sector Cloud Dependence: A Billion-Pound Risk
Almost every UK government body depends on a handful of American hyperscalers, concentrating billions of pounds and critical services within systems that Whitehall cannot fully access or control.
Key Findings:
- Widespread Dependency: 95% (or 99% including software-as-a-service) of UK public sector organisations use US hyperscale cloud providers, spending £17.7 billion in 2023/24.
- Concentration of Spending: Microsoft, Google, and Amazon control the majority of connections across surveyed departments and councils. 55% (£9.9bn) of £17.7bn spent with major tech suppliers went directly to hyperscalers or their resellers.
- Geopolitical Concerns: 39% of UK firms reported outages from US hyperscalers in the past year, and 77% of IT leaders expressed geopolitical concerns about data access through supplier gateways and the US CLOUD Act.
- European Alternatives Sought: Interest is growing in European cloud alternatives to AWS, Azure, and GCP due to these security and sovereignty concerns.
Regulatory Action:
The UK’s competition watchdog found that AWS and Microsoft hold significant unilateral market power but opted for voluntary commitments on egress fees and interoperability rather than binding rules. They are also investigating Microsoft’s software licensing practices separately.