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May 20, 2020updated 01 Jul 2022 10:27am

MOD Hands Microsoft £17 Million Azure Support Contract – Without Competitive Tender

"The level of expertise required will not be available if we contract with a third-party consultancy"

By CBR Staff Writer

The Ministry of Defence (MOD) has handed Microsoft a £17 million contract to support the build out of a bespoke Azure private cloud — controversially, without competitive tender/publication of a contract notice.

The MOD today said that given the “scale of the MOD’s of Azure cloud exploitation” it would struggle to get the support it needs elsewhere. (Azure itself was chosen by the MOD via competitive tender).

“The level of expertise required will not be available if we contract with a third party consultancy”, it said in the contract award — worth £17.7 million to Microsoft over 23 months, starting June 1, 2020.

The contract is on behalf of the MOD’s “Defence Digital“: an organisation that merged a number of military organisations, including Information Systems and Services (ISS) in 2019. (ISS was an IT procurement body within the MOD that answered to  Strategic Command).

Defence Digital has an annual budget of over £2 billion and a team of around 2,400 personnel.

It is led by the MOD’s CIO Charles Forte: a former deputy group global CIO at BP and CEO of global IT services at Prudential.

MOD Azure Award: Requirement Can “Only Be Supported by Microsoft” 

The MOD said today that it will be the “first and largest customer in the UK and Europe who will be running UK hosted Azure services in the cloud.” (It became the first tenant of Azure’s UK data centre in 2016).

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The notice, posted to a European procurement portal, added: “The MOD requirement mandates data sovereignty and reliability and this non-negotiable requirement can only be supported by Microsoft for these services at this scale.

“The current requirements cannot be delivered without the direct access to Microsoft Support with the scale of the MOD’s of Azure cloud exploitation and the level of expertise required will not be available if we contract with a third-party consultancy. Furthermore, we have the evidence that by having direct links to product developers, we have been able to solve issues with the service that are unique to MOD’s future requirements.”

It added: “One aspect of exploiting cloud services is the use of power applications which MOD has already invested in. At the same time, there are several key initiatives that only Microsoft have the knowledge breadth and skills depth to deliver the scope of work…”

The award comes as AWS and Azure continue to trade barbs in the US over the latter’s controversial award of a $10 billion cloud programme for the Pentagon to integrate cloud/data centre services and use machine learning to power new combat capabilities, with Microsoft clearly coming out on top as a preferred defence contractor on both side of the Atlantic.

The Ministry added that by being part of Microsoft preview pilots (“only a handful of organisations around the world get early access to products before they are released”) such early exposure gives the MOD the “opportunity to influence and shape the products to suit our future defence needs: we will not get this access without a direct relationship with Microsoft.”

The MOD spent £56 million between 2019-2020 on the government’s “G-Cloud” procurement platform, including £11 million with Entserv, £5 million with Rackspace and £3 million with IBM, government data shows.

See also: Amazon Blasts Microsoft for “Spotty Performance” as JEDI Continues

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