The cloud services market is dominated by the big – and largely U.S.-headquartered – IT players, including, of course, Google, Amazon, Microsoft Azure, IBM and Oracle. Look around globally, and you could also throw the likes of Germany’s SAP and Chinese e-commerce poster child, Alibaba into the mix, emphasizing that this is a space reserved for the giants of the industry.
Against that background, UKCloud arguably bucked a trend when it last week became the only local cloud services company to be recognised so far -through a memorandum of understanding – as a strategic provider to the U.K. government in this space. And according to CEO and cofounder Simon Hansford, it is important that a British business is sitting within the charmed inner circle of cloud companies supplying the public sector.
Established in 2008, UKCloud set out with the express aim of servicing Britain’s public sector. “We were looking at the British government spending £17.5 billion on I.T. projects,” he recalls. “We thought cloud computing could disrupt that.” In particular, Hansford saw the cloud as enabling government to escape the strictures associated with being locked into multi-year service contracts.
Since then, UKCloud has done pretty well in its chosen market. Thanks in part to the public sector’s G-Cloud procurement system it has been able to win contracts directly and indirectly. “About half our business is direct with government departments,” Hansford says. “The other 50 percent comes through working with partners.” Last year, turnover came in at £37 million and the company secured a £25 million investment from Digital Alpha.
Hansford says the company has so far won orders from every government department. So that begs a question. Why is the memorandum of understanding (MoU) such a big deal?
The answer lies in a shift in procurement policy. ”Last year the government announced its One Government Cloud strategy,” says Hansford. Essentially, this not only commits the public sector to scale up its use of cloud services but also sets down policy guidelines – or as Hansford puts it, a playbook for public sector procurement. In this environment, a seat at the table of providers is clearly important.
But is it a big deal as far as the rest of us as are concerned? Yes, you could say it’s a good thing that a relatively young founder-run company has established a public sector bridgehead in a cloud market dominated by just a few major suppliers. But does it really matter who provides the software as a service infrastructure?
Choice And Sovereignty
Hansford says it does. “It’s a question of choice,” he says.”We think that government should be very careful about being locked into certain technologies or providers. Typically, you don’t want to use a single provider.”
There are of course a number of providers – small as well as large – so choice is available, but Hanson cites another reason to ensure that a local provider has a role. “There is a lot of concern about data sovereignty,” he says. “For instance, in matters such as prison policy, passports, and policing, it really does matter where your data is stored.”
Data sovereignty questions have been answered by the global players in terms of maintaining servers locally, but Hansford says this doesn’t necessarily address the possibility that – for example – a U.S. company might be required by authorities in Washington to open up their servers for scrutiny, even if the information is held overseas.
Data As Currency
And as Hansford sees it, data will increasingly be seen as an asset that can be monetized by government. He cites the example of health data that could be sold – rather than given away – to pharmaceutical companies. “I believe data will become a currency. Nations will trade data and it will create new industries,” he says.
Hansford acknowledges that in order to trade data governments will have to create legal frameworks that will allay any public concern. “The idea that data is a currency is new and requires discussion. But it will happen,” he contends.
Part of that will almost certainly involve addressing the data sovereignty issue – hence, as Hansford sees it, the significance of having British companies with a local infrastructure playing a role in government cloud computing.