Romolo Tavani - stock.adobe.com

News

AWS emerges as ‘sole bidder’ for HMRC’s £500m datacentre migration project as rivals exit

A week after HM Revenue & Customs’ reliance on Amazon Web Services came under scrutiny from MPs, the public cloud giant remains the only supplier in the running for the tax agency’s £500m datacentre exit project

Caroline Donnelly
By
Published: 29 Oct 2025 16:30

Amazon Web Services (AWS) is the last supplier standing in the controversial £500m race to become the hyperscaler responsible for overseeing a 10-year datacentre exit project for HM Revenue & Customs (HMRC), Computer Weekly has learned.

As previously reported by Computer Weekly, the government tax collection agency needs a hyperscale provider to manage the migration of its on-premise servers from three Fujitsu datacentres to the cloud.

“The objective of the programme is to exit all services from three managed datacentres and decommission any remaining infrastructure within the current contract period of the incumbent datacentre hosting provider (June 2028),” said HMRC in a tender document.

“The … programme has identified that modern hyperscaler cloud technologies would be the preferred solution to transition to, whilst supporting HMRC’s strategic objectives, without affecting business continuity or incurring an unaffordable cost of change.”

HMRC procurement documents state the successful bidder for the contract is expected to be announced in late April 2026, but sources with close working knowledge of the procurement process claim AWS has recently become the only supplier left in the running for the contract.

It was previously confirmed by HMRC in June 2025 that AWS, Google, IBM, Microsoft and Oracle were all approached to participate in the request for information portion of the multi-stage tender process for the deal.

At some point over the past few months, Oracle and Microsoft exited the process, and AWS, Google and IBM were provisionally shortlisted. “There were three big providers selected and provisionally down-selected for the tender, which was AWS, IBM and Google … but IBM has now withdrawn from the process and Google has pulled out, too,” said a source.

Unfair bias

It is claimed that concerns about the tender being unfairly biased towards AWS were a factor in the suppliers’ decisions to withdraw.

Sources also claimed HMRC had pushed back on supplier suggestions that adopting a hybrid cloud setup might be a better, more cost-effective way to accommodate a migration off-premise, rather than a wholesale move to the public cloud.

This recommendation was given, Computer Weekly understands, on account of how much legacy IT the agency wants to migrate from its three datacentres.

Computer Weekly contacted the Google Cloud team for confirmation of its withdrawal from the tender process, and the reasons why, but was told the company has no comment to make at this time.

The IBM team had not responded to a similar request for comment at the time of publication, despite several attempts being made to contact them.

A spokesperson for AWS also told Computer Weekly it had nothing to share regarding the story.

“So, what you’re left with is a situation where HMRC is going into a half a billion-pound tender process with only one party in the running for it, meaning there is no commercial competition for this contract going on at all,” the source added.

Read more about HMRC and its datacentre exit project

Anti-competition concerns about the contract have been previously raised to Computer Weekly by UK cloud market stakeholders, with objections pertaining to HMRC’s specific request for a “hyperscaler” to deliver the project.

“HMRC is leaving itself wide open to legal challenge given that the term ‘hyperscaler’ is widely associated with the US global cloud players,” said a former government IT advisor, who spoke to Computer Weekly on condition of anonymity, at the time.

The projected length of the project also raised eyebrows, with concerns being raised about the risk of supplier lock-in tied to the contract being 10 years in length.

The notion that AWS is the only supplier left in the running for the contract also comes hot on the heels of the Treasury Select Committee querying HMRC’s reliance on AWS’s US-based infrastructure, after the agency’s operations were disrupted on 20 October 2025 by Amazon suffering a 14-hour outage in its US-based datacentre region.

Computer Weekly put the claims made in this story to HMRC about the other suppliers exiting the procurement process, and also asked for a response regarding the anti-competitive concerns raised about it.

In response, a spokesperson for HMRC said: “We follow government procurement rules when awarding contracts, ensuring a competitive and fair tender process, and value for money for taxpayers. Once contracts are approved, we publish the details on Contracts Finder for transparency.”

According to the government’s own Digital Marketplace figures, which track sales made through the G-Cloud procurement framework, nearly half (45%) of the total £811m in cloud services HMRC has acquired through that purchasing agreement has been spent with AWS, with sales totalling £367.25m.

Read more on Infrastructure-as-a-Service (IaaS)