Data Backup Digest

HM Revenue & Customs (HMRC) has shifted away from its previous data storage provider to use Amazon Web Services. Their previous provider was based in Salford, named DataCentred. Its move to AWS has apparently saved over 50% in cost and improved its data resilience.

However, the tax agency has come under some criticism as the previous company have complained that the loss of the contract has forced it to file for bankruptcy. Despite a government pledge to award one-third of its procurement spending to small and medium sized businesses, HMRC has gone with one of the largest data companies in the world with Amazon.

Criticism also comes due to the fact that Amazon aren’t exactly known for their solid tax practices. Until 2015, Amazon were using a structure that allowed them to route their profits through Luxembourg, thus paying lower tax. It was cracked down on at the time. Amazon, for their part, say that they continue to invest in the UK, opening new offices in Cambridge and London, and creating thousands of permanent and temporary jobs.

However, Public Accounts Committee chair Meg Hillier commented that she doesn’t think there’s anything wrong with HMRC contracting Amazon to handle their data storage. Indeed, data storage for a government tax agency is serious business, and one that needs the infrastructure that can support such important data.

The cloud market has changed into a demand for hyperscale cloud, especially for large businesses. “Hyperscale cloud technology is newly available in the UK and the larger cloud capability offers more resilient services at a significantly lower cost to the taxpayer,” said a spokesperson for HMRC.

“We need resilience in how they hold that data for us, and the price reduction was more than 50% for us, so there is a clear value-for-money explanation,” said Meg Hiller. They don’t have physical buildings, but their data still needs to stored in multiple sites so that they don’t risk losing data or having an outage of service to others.

It’s worth noting that HMRC have a record for helping support smaller businesses. For example, they unbundled their £10bn Aspire deal, with provided a range of opportunities for others to seize contracts that would have otherwise been unavailable. They now have over 100 small and medium businesses working with them, who weren’t previously, thanks to that deal.

He noted that although they are increasing the amount of business they do with smaller businesses, in this particular example it wasn’t working out. And frankly, that’s entirely fair. Amazon have such a large infrastructure and the necessary support available to handle the needs of HMRC. When it comes to data storage, it isn’t worth risking a smaller firm that might not have the funds or the experience to handle the requirements.

HMRC’s current Chief Digital Information Officer is on a secondment from Microsoft for two years. Jacky Wright is apparently recusing herself from making any decisions involving Microsoft. It is Microsoft, and their Azure platform, that make up the other half of HMRC’s data storage contract.