Government IT provider UKCloud goes into liquidation UKCloud and its parent Virtual Infrastructure Group have been forced into liquidation, potentially bringing an end to the ailing business. As a British public-sector IT provider, UKCloud had central and local governments, the police, the Ministry of Defence, the NHS, Genomics England, the University of Manchester, and more as …
If the Great Dishy Rishi British Government are currently trading, for as far as one can realistically see into the future, bankrupt, is that legal?
And if neither legal nor lawful, is such then bound to be classified and prosecuted or promoted as a criminal joint enterprise?
Government et al are notoriously slow payers, so wouldn't be surprised if they were suffering from poor cash flow combined with slim profits on government contracts, which given the investment and overheads necessary would have probably meant they were unable to service investment loans.
I'm a little surprised they have actually gone bust as opposed to being taken over by some other UK government approved cloud provider. Clearly, HM Government haven't kept their eyes on the ball here.
>Wait, a cloudy business picking up Gov contacts going bust? How?
Because the contracts were chicken feed mostly done to satisfy tick box requirements from ministers that projects and procurements involve locally-based SME-scale suppliers. Skyscape/UKCloud billed themselves as a cloud host, but frankly from experience they were much more like a traditional managed service provider or colo than a cloud provider.
The services on offer were narrow and came with severe restrictions on scale, including a typical requirement for large commits and reservations. Some of their services - managed DBs in particular - were quite good, but honestly that stuff is commodity these days and UKCloud lacked any differentiation or cost advantage.
Their status as "cloudy" really was marketing more than reality. They never got beyond low 10s of million in revenue and practically never turned a profit. That's a tidy revenue stream but it's not a cloud operator by anyone's margin. AWS, Microsoft and Google are spending billions per year to support their cloud platforms. Even also-rans like Oracle are spending nine figures. In a business dominated by efficiencies of scale and pricing competition the failure of the minnows is inevitable.
The days when you could sit there and claim "Ah, well, we can keep your data local!" or "We've SC cleared our staff!" and do business on the fear of international data transfers are long-since gone. Everyone and their mum has data sovereignty controls now, and the main cloud providers do accredited government services too.
gov.uk already started a mass migration to AWS and this probably precipitated UKCloud's downfall.
I vaguely remember there was someone from Whitehall who went to work at Amazon or vice-versa a few years back and then the migration started, I tried to search for it for about 10 minutes but failed to find it so it looks like it's lost to the memory hole.
>gov.uk already started a mass migration to AWS
This really isn't true. Government is a broadly even mix of AWS, Azure and on-premises hosting. Local government skews more towards Azure, central a touch more towards AWS.
Ain't nobody in government got the money, skills or time for a "mass migration" of anything. Chance would be a fine thing.
I agree, to a degree.
It IS possible, but the trick is to stay under the political radar. As soon as a politician gets wind of it, all bets are off because 99% of them don't know what they're talking about but they still influence major decisions.
Been there, done that. As I said to my kids, I earned my gray hair..
Well it looks like some agreement's between the little bits has been made somewhere. First four hits from Google:
Migration to AWS - GOV.UK Developer Documentation
Amazon Web Services (AWS) Migration and Implementation Services - consultancy wouldn't sell it in the marketplace if government weren't buying
alphagov/govuk-aws: The GOV.UK repository for our Migration to AWS
AWS for the UK central government | Amazon Web Services (AWS)
Here you go.....
https://diginomica.com/liam-maxwells-move-to-aws-is-problematic-and-not-just-because-hes-the-governments-chief-tech-advisor
https://www.theregister.com/2018/08/07/liam_maxwell_tech_adviser_leaves_ukgov_for_amazon/
“It’s great to see that Amazon Web Services will be providing commercial cloud services from data centres in the UK. Not only will this mean a significant investment in the UK economy, but means more healthy competition and innovation in the UK data centre market. This is good news for the UK government given the significant amount of data we hold that needs to be kept onshore.”
https://www.silicon.co.uk/cloud/cloud-management/aws-unveils-uk-cloud-region-180127
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Why is the UK or anyone in Europe, like the french (uhhh ... OVH, gasp) are even trying to compete with Amazon et al.
The "sovereignty" was the only fragile selling point, and completely out of the windows, now the same is in place with Amazon et al.
So, remains only features and prices to compete with them ! Good luck with that ! Features are literally updated in the daily basis for the big 3, and they have gigantic economies of scale.
Game over, local providers ...
>Amazon & co may say so, but you only have their word for it
Amazon stand to lose a lot of business if it turns out they are lying to governments.
And get hit with a few things like a monopoly verdict
>Local providers can guarantee that your data stays local
Assuming you have the ability to verify if Bert's Genuine British data storage isn't really run by a guy called Dmitri
The death knell came as soon as they lost their USP, when the government opened up where data could be stored.
In Gov words "the internet is suitable for the majority of the work the public sector does". And it probably is when secured. That's the bit that makes me uncomfortable. Not that any home grown or on-prem is somehow immune to security issues.
But you can understand the desire to make things more affordable and scalable for the Gov. Maybe they even have robust measures in place to secure it all.... *nervous laughter*
The obvious sign here the ship was sinking fast, the article says they managed to not gain any significant work loads during the pandemic?!! That's impressive.
As others have said when faced off against the hyper-scalers even if UK Cloud were cheaper, i'd bet the margins were thin.
Amazon and Azure are run by foreign powers. i.e. if Uncle Sam says jump then they will ask 'how high'.
Given the current direction of the USA... as in heading towards fascism and totalitarianism under the orange turnip, keeping our dependencies on them down to a minimum at least in the short to medium term is probably a wise move politically.
Not just Braverman. I was - perhaps unwisely, prepared to give Sunak the benefit of the doubt, but the appointment of so many from the hard right, ERG members and sympathisers, Tufton Street worshippers, ended that quicker than I expected.
It's basically Truss 2.0 with a "but don't crash the markets" poster on every wall.
Bugger! I've been hacked! - Please let it be known that I for one welcome our fasci^W compassionate overlords and their ankle-bracelets for dissenters.
The reality is that UK government don't understand cloud, and OCI and Azure were able to do a better job of holding hands and convince them that hybrid private cloud is as cloud as they need to go.
I have been in the depths of their cloud operations for the last 2 years, and can't wait to move to a more 21st century gig - my gut feeling with UKCloud is they underestimated how expensive it was to deal with the public sector.
Doubt we'll see any other token UK company take their place.
So a Government IT procurement thingy is going bust just as the Government is buying lots of IT:
https://www.theregister.com/2022/10/26/uk_big_data_deals/
I do hope HMG gets a good deal with the current procurement and doesn't make any embarrassing mistakes in contracting from suppliers who 'go bust'.
As for UKCloud, couldn't they just nationalise the thing to avoid the disruption of changing contracts etc? Oh, of course not, Tory Government and all that. OK sell / give it to the Americans just like everything else.
(Alien icon 'coz I do hope there is some sort of explanation out there.)
Re: ConfusedUKCloud are a business who supply services to HMG. They are not part of HMG. They've gone bust because HMG - rightly - won't procure large-scale computing services and infrastructure from a debt-financed, local firm with no scale, resilience or track record. .... Anonymous Coward
Procuring such services [large scale or otherwise] from foreign firms is proven a lot dodgier and much more dangerous than ensuring they are provided locally ..... for it is an ACTive vector and titanic vulnerability with catastrophic exploit potential over which the home team have no influence or power/command and control.
And the clearest evidence currently for that is presented daily in the stranglehold which foreign energy exports do so easily export and exert upon markets and livelihoods/coincidentally interconnected internetworking realities.
UKCloud are a business who supply services to HMG. They are not part of HMG. They've gone bust because HMG - rightly - won't procure large-scale computing services and infrastructure from a debt-financed, local firm with no scale, resilience or track record.
Yes. Albeit there is precedent - Sheffield Forgemasters were recently acquired by the Ministry of Defence, because they were sick and tired of Tory donors like Gupta and Greensill crashing key components of their supply chain like Liberty and Speciality Steels. The MoD has a very strong interest in the likes of BAE & Rolls Royce being able to access exotic alloys domestically.
Sometimes it's sensible for HMG to take over the debt-financed, local firm precisely because it doesn't have the scale or resilience to play on the open market, but we nonetheless need them.
UKCloud probably doesn't fit into that bracket though, being more of an MSP than actual cloud. When we do need something local, we actually can do it ourselves (e.g. Parliament's M365 instance, run privately in a Gov DC AFAIK), or else there are no shortage of MSPs able to host services in UK datacentres for public sector clients.
Trying to be a mini-cloud though is hard. No way to compete with the big-3 economies of scale. You need more of a USP than "British".
I remeber vagely a story about a cloud-connected fridge where the Cloud has gone off-line. And also about a thermostat and about an AEG microwave with an hot-air oven update. Sure, that were different kind of clouds, but is there a more accurate list of cloud providers (general computing, storage, IoT) that are now off line?
Throughout this process, NHS England, Ernst & Young and the Cabinet Office have reassured UKCLoud customers that there is no need to panic, that there is time to migrate and that the priority is continuity of service. EY was even stating they had advanced M&A activity and did not need to migrate. The cabinet office has even been reassuring that they have provided funding to ensure continuity of service for a minimum of 6 weeks from the 25 October to ensure an orderly migration.
Everything changed last week when EY started demanding a >700% fee increase from UKCloud customers for November and no guarantee of continued service provision during that time. A position that they have continued to double down on since. Not great for continuity of essential frontline patient service provision.
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