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DfE signs new £77.5m Microsoft cloud deal

Sam Trendall August 8, 2024 in Business and industry, News - 3 Minutes
Credit: Pxhere
The Department for Education has retained incumbent supplier Bytes to continue delivering Azure hosting and related services, but will also explore the possibility of expanding to use other cloud providers

The Department for Education has signed a major new deal for Microsoft Azure cloud hosting and related services.

The DfE’s cloud needs have been supported since 2020 by Microsoft reseller partner Bytes Software Services. While it finalised a full replacement for this engagement, the Surrey-based supplier was recently signed to a short-term continuity contract worth £4m and covering the past two months.

Having completed the competitive procurement process for a long-term deal, Bytes has now been retained by the DfE for the next three years. The new deal between the two parties came into effect on 1 August.

The agreement is valued at £77.5m, once VAT is included, and can be extended for a further year – although the text of the contract indicates that this “can only be triggered” if the department “has not fully utilised” the agreed value set out in a Microsoft Azure Consumption Commitment agreement.

The document shines a light of the DfE’s near-comprehensive cloud adoption, stating that it “currently hosts over 99% of its technology-delivered services in the public cloud”. It adds that the organisation’s “current cloud strategy is based upon a single provider model: Microsoft Azure”.

The department expects to remain committed to this dedicated Microsoft model – but, to understand its longer-term options, Bytes will also be asked to “to demonstrate how it can support DfE in transitioning to a ‘multi-cloud’ model over the life of the contract, and the benefits that this could deliver to the department”.

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The contract adds: “Possible assistance may include but should not be limited: to the ability to benchmark and compare workloads across enterprise cloud hosting providers; undertake cloud hosting provider assessments; understanding of available routes to market; and understanding of possible migration paths. For the avoidance of doubt, DfE will be under no obligation to migrate to a multi-cloud model, and any decision will be based upon a full operational assessment, which will include a value-for-money assessment.”

As well as supporting the provision of the department’s core public cloud hosting needs, the reseller will play an important role in delivering “a range of added value services”.

“It is essential that DfE extracts maximum value from its public cloud investment, with the supplier expected to apply its expertise to allow DfE to obtain optimal value from its cloud hosting service,” the contract says.

The provision of this expertise will include the delivery of services including “account and contract management”, as well as “investment assistance… to inform [the department] of, and support in our understanding of, any… [Microsoft] product and/or service alterations, with advice on the steps that DfE should take to optimise value in its investment”.

Bytes will be tasked with providing regular updates on cloud service consumption and spending levels – ideally via an online portal through which DfE officials can access this information.

The department will also require “support in upskilling its staff to take advantage of cloud capabilities… [such as] delivery of workshops, provision of training credits and/or other value add options”.

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Sam Trendall

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