The department has concluded that it wishes to appoint one of the market’s biggest cloud firms to lead modernisation, which has a 2028 deadline for successfully exiting three Fujitsu datacentres

HM Revenue and Customs has formally invited bids from hyperscale cloud providers to fulfil a potential half-a-billion-pound engagement focused on addressing “increasing levels of technical debt” in the department’s infrastructure.

The central goal of HMRC’s Data Centre Exit (DCE) programme is to enable the department to migrate from three on-premises datacentres – operated by long-time supplier Fujitsu – and move systems and services to a cloud environment. The tax agency originally hoped to have completed its departure from the Fujitsu facilities by summer 2022 – but last week signed a £220.3m “bridging” deal with the firm that runs until 2028.

By then, the department intends to be two years into an initial seven-year contract with a hyperscale cloud firm which, according to a newly published contract notice, will be appointed to deliver “the objective of the programme… to exit all services from three managed datacentres and decommission any remaining infrastructure within the current contract of the incumbent data centre hosting provider [which ends in] June 2028”.

The hypsercale market is comprised of the world’s biggest public-cloud hosting firms. The sector is dominated by Microsoft and Amazon Web Services which, between them, hold as much as 80% market share in the UK, according to a recent regulatory report. Other firms often grouped in the hyperscale bracket include Google, IBM, and Oracle.

In a planning notice released earlier this year, HMRC said “that hyperscalers may wish to sub-contract elements of the service delivery, but it is mandatory that the contracting entity is a capable hyperscaler who will manage the migration and hosting from the current on-premises solution”.

The new notice, which gives prospective providers until 1pm on 23 July to submit a request to participate, provides further insight on the need to upgrade HMRC’s infrastructure, and why the department believes a major cloud firm is the right partner to help deliver such improvements.

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“HMRC’s IT infrastructure has been building increasing levels of technical debt due to the age of the underlying hardware and software, making modernisation a priority for the organisation,” the commercial document says. “As part of our ongoing technology strategy, we have developed cloud capabilities and platforms to manage parts of our previously migrated estate. This has provided us with valuable insights, reaffirming that cloud capabilities, and their continued evolution, present a strong opportunity to advance our journey towards modernisation.”

The notice adds: “The DCE 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. Furthermore, the strategy aligns with the capabilities of the market, the overall aspiration to move to the cloud, and evidence to suggest that transitioning to a cloud solution would be more scalable and cost-effective.”

Extra services
The chosen supplier will be appointed to an agreement due to run until at least 2033 – and potentially until 2036. During this time, bidders are advised that “HMRC may have a requirement to engage the hyperscaler in additional activities which do not form part of the baseline contract”.

The contract notice lists a wide range of services that may be brought under the umbrella of the deal: “business services transformation – [including] analysis, redesign, reengineering of migrated services; migration and/or transformation of existing services hosted in locations other than the three in-scope legacy datacentres; new business services development – [including] design, develop and implement new business services and capabilities enabled by the cloud; business service roadmap development support; technology platform roadmap development support; application modernisation and optimisation – [including] assessment and upgrade of legacy applications to take advantage of new infrastructure capabilities, including cloud native refactoring, containerisation, API integrations etc; cloud network optimisation; data archiving and purging; platform/service cost optimisation; application and infrastructure security hardening / improvement works; technical debt reduction; security improvements; well-architected reviews and moderation; [and] training and upskilling of [HMRC] personnel”.

PublicTechnology’s initial reporting on HMRC’s latest contract with Fujitsu contained a pledge made by a government spokesperson that it intended to “quickly and securely remove” the vendor’s systems across Whitehall. A few hours later, this comment was walked back, although government still stressed that the latest contract did not affect plans for HMRC to move away from the vendor, nor that “we must never forget the lives ruined by the Horizon scandal”.