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Crown Hosting Data Centres secures £250m government colocation deal

Cabinet Office joint venture with Ark Data Centres secures a second term providing colocation services to the government

The Cabinet Office’s joint venture with Ark Data Centres will continue to play host to the government’s non-cloud workloads for another seven years, as revealed in a contract award notice that confirms no other firms were ever in the running for the £250m contract.

The joint venture, known as Crown Hosting Data Centres, was created in March 2015, with Ark Data Centres holding a 75% share of the business and the rest owned by the Cabinet Office.

It was set up to encourage central government organisations to shutter their own datacentres in favour of migrating their non-cloud, on-premise workloads to Crown Hosting’s colocation facilities instead – with the help of the Crown Hosting framework.  

The first iteration of the framework, which ran for seven years from March 2015, was expected to save government departments £105m in private datacentre hosting and management costs.

In February 2022, procurement chiefs at the Crown Commercial Service (CCS) published a tender confirming the framework was coming up for renewal, which stated that no other parties would be competing against Crown Hosting Data Centres for the contract.

“The works, supplies or services can be provided only by a particular economic operator for the following reason: absence of competition for technical reasons,” the document stated.

“CCS is intending to start negotiations with a single supplier (Crown Hosting Data Centres) for the provision of colocation premises for the ICT of its public sector customers.”

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This document also stated that the start date for Crown Hosting II, as the second iteration of the framework is known, would go live “on or around 15 March 2023”.

However, the government published a contract award notice on 1 November that confirms Crown Hosting Data Centres has succeeded in becoming the seven-year framework’s sole provider, and the go-live date has now been brought forward accordingly.

“CCS ... has now awarded the contract to Crown Hosting Data Centres Limited,” it said. “CCS determined that a seven-year framework was justifiable to enable multiple customers to start and complete four-year, full relocation programmes.”

Computer Weekly contacted CCS for a statement about the contract award and for further clarification on why no other firms were in the running for the framework, and received the following response.

“This is considered an item of critical national infrastructure at a premium rate. Crown Hosting Data went through a proper process and CCS are confident that they are the only organisation in the UK capable and willing to provide this,” its statement read. 

According to documents filed with Companies House, Crown Hosting Data Centres has proven to be a lucrative venture for the organisations involved. The company’s financial results, covering the 12 months to 30 June 2021, show the firm made a profit before tax of £3m for that period, up from £2.5m the year before.

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