HMRC's switch to AWS killed a small UK cloud business

DataCentred, an exclusive British minnow, filed for bankruptcy after HMRC, its biggest client, broke a service contract in favor of an agreement with Amazon, the company recently accused by MPs of tax evasion.

DataCentred, based in Manchester, has signed an agreement with HMRC there for two years through the framework of the G-Cloud: its infrastructure OpenStack manages a critical system in the tax department, a contract that has supported 85% of the DataCentred invoicing.

However, The Register may reveal that six months ago, the company was informed that the tax collector would no longer use its services because it reorganized the policy of being independent of the cloud to become an AWS fan.

DataCentred is not the only small cloud provider in the UK that has lost shares with HMRC as a result of the policy change. We know at least two more, although DataCentred appears to be the first direct victim

The company was founded by TeleCity founder Dr. Mike Kelly with £ 9 million funding from venture capitalist John Moulton and local authorities. The company returned £ 1.2m in 2016, but sank red after losing the HMRC contract and entered the administration in August.

Readers of Reg will undoubtedly discuss the weaknesses of being overly dependent on a single customer, but also the irony of seeing HMRC pay for the services of AWS, a company sometimes criticized for its fiscal efficiency. .

Since Amazon and Microsoft set up local cloud operations in the UK several years ago, leasing storage space to other vendors in the AWS case, some Gov.uk personalities seem to have surrendered. his rhetoric of SMEs, deciding to work with technologies. giants after all.

The registry also found that the Ministry of Labor and Pensions has a policy of only purchasing public services in the Amazon cloud, Google or Microsoft. We asked the department to comment.

While there are compelling reasons for this decision, the question also arises whether Whitehall is swapping a group of major IT providers, known as "oligopoly" by former cabinet minister Francis Maude. - for another.

Such a move also seems to make redundant the G-Cloud IaaS, which has been put in place to provide small cloud service providers in the UK a level playing field for short-term government contracts.

The registry asked HMRC how their decision was in line with the government's promise to award contracts to SMEs; Has the department risked creating a new lockout by doing so? and whether the ministry can be perceived as a reward for corporate misconduct, because Amazon has often been criticized for avoiding taxes.

An HMRC spokesperson said: "We have discussed our long-term plans to provide cloud computing and what is best for our customers.

"The hyper-scale cloud technology is available again in the UK and the increased capacity of the cloud provides more robust services at a significantly lower cost to the taxpayer."

The ministry stated that it makes decisions about its suppliers through a fair and open process, and in accordance with the rules of the public service. Regular financial and tax compliance audits will be conducted as part of this process.

The European Commission recently ordered Amazon to repay € 250 million (£ 222 million) for illegal and unfair state aid from Luxembourg.

The Amazon group denied receiving special treatment and paid the full amount of the tax in accordance with international tax laws and Luxembourg.

The company, headed by Jeff Bezos, has also previously said it pays for all required taxes in the UK and in all countries where it operates.

"The corporate tax is based on profits and not on revenues, and our earnings have remained low as retail is a highly competitive and low margin business and we continue to invest heavily.