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Cloud service provider will manage the UK tax authority’s data centre exit, but the cloud market’s competition is under scrutiny by the CMA. The UK tax office, HMRC, has awarded a £473m (US$629m) contract to AWS to help switch from traditional data centres to cloud technology.
HMRC’s data centre exit
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The mandate says the agency must leave three old data centres run by Fujitsu and completely shut down its remaining physical hardware by June 2028. AWS must provide strong hyperscaler services that can host all of HMRC’s complicated digital tasks.
The range goes beyond simple hosting. It provides the ability to adapt to future technology changes and includes extra services like full business service upgrades, moving non-Fujitsu data centre services, and big application updates.
The hyperscaler mandate
The procurement, officially named ‘Procurement for the provision of Hyperscaler Services to enable Data Centre Exit,’ was explicitly designed to attract bids from only the industry’s largest cloud providers.
The first notice in March 2025 said the total cost would be £500m (US$666m) including VAT. HMRC made it clear that they planned to choose one “hyperscaler.”
This winning bidder has the big job of moving all services and infrastructure from the old Fujitsu sites to safe, UK-based cloud hosting. The technical challenge is big because of the old system in place. It uses a complex mix of almost ten old operating systems like HP’s Unix, IBM’s AIX, and Sun’s Solaris.
Competition and market dominance
Reporting from The Register in October indicated that, although HMRC informally shortlisted AWS, Google and IBM during the bidding phase, the actual technical specifications strongly narrowed the competitive field.
An individual knowledgeable about the procurement suggested that the tender design effectively limited the pool of realistic winners to only AWS or Microsoft. This assertion is supported by an insider comment published in.
“[It was all about] ability to execute, a proven history of working with departments like this – seven-year track record of hosting massive hyperscaler-type services. It could only be AWS or Microsoft,” said the insider to The Register.
AWS’s selection aligns with its industry standing: the company secured first place in DataCentre Magazine’s Top 100 Data Centre Companies list 2025, recognition derived from its unmatched global footprint, leadership in AI infrastructure, and dedication to energy efficiency.
While AWS currently operates one existing UK cloud region in Bristol, the company has demonstrated expansion plans, having recently filed for a major new London data centre with Buckinghamshire Council.
