Vendor lock-in is inhibiting the UK government's ability to negotiate cloud contracts, says the Cabinet Office's Central Digital and Data Office.

First reported by The Register, a document from the Cabinet Office that the "UK government's current approach to cloud adoption and management across its departments faces several challenges" and risks "concentration and vendor lock-in that inhibit UK government's negotiating power over the cloud vendors."

The document adds that unless action is taken, the government will lack leverage over pricing and products.

"This path forecasts a future where, within a decade, the public sector could face the end of its ability to negotiate favorable terms, leading to entrenched vendor lock-in and potential regulatory scrutiny from [UK regulator] the Competition and Markets Authority."

Called UK Public Sector Cloud Marketplace, the document was written by Chrus Nesbitt-Smith, a CDDO consultant, and is being circulated around Whitehall.

The concern follows several notable agreements with major cloud providers. For example, the UK Home Office signed a £450m ($568.64m) cloud deal with Amazon Web Services (AWS) in December 2023, and earlier this year the Department of Work and Pensions (DWP) signed a £20m (~$25m) contract, also with AWS, and another valued at £350m ($440.6m) with HMRC. Those three deals combined total £894m ($1.125bn).

Other departments have similarly signed deals with AWS over the years, including the NHS, Crown Marketplace, Home Office, and Ministry of Justice.

Nesbitt-Smith also posted a YouTube video on the subject, in which he says that current government spending on the cloud is around 45 percent with AWS, 45 percent with Azure, five percent with Google, and five percent with other suppliers.

In addition to concerns about vendor lock-in and a lack of negotiation power, Nesbitt-Smith's document notes that cloud adoption times for the government often take between six and nine months, and often cost more than £500,000 to activate and deploy.

Further issues include an absence of a standardized approach which leads to "inconsistencies and reinventions of low-level cloud architecture, security, and compliance across departments, posing risks, inefficiencies and challenges of understanding equivalent controls in data sharing agreements."

Nesbitt-Smith's solution is a UK Public Sector Cloud Marketplace service in partnership with cloud providers which would provide "consistently secure, well-architected cloud environments that can be rapidly deployed."

AWS told The Register: "Government departments using AWS are not only enjoying cost savings of up to 60 percent but also supporting a vast ecosystem of smaller companies, across the UK, that offer products and services that complement and help customers take full advantage of AWS.

"Amazon recognizes that its status as a supplier to the public sector is a privilege which has to continually be re-earned through the quality of our services and the value for money that we bring for UK taxpayers. We know they will only remain customers for as long as we are able to deliver on both of those things."

A government spokesperson told the publication: "CCS agreements offer the widest range of suppliers for the cloud market, including 5,000 suppliers on G-Cloud 13, with 91 percent of them SMEs.

"Government's Cloud First policy is kept under regular review to ensure it reflects the latest guidance and recommendations, and states that organizations should always scrutinize their selection of vendors.

"As per the government's Digital Roadmap we endeavor to make significant savings by leveraging our combined purchasing power, as we seek to shift to a 'buy once, use many times' approach to technology."

In October 2023, the UK Competition and Markets Authority launched an investigation into the cloud market following a referral from Ofcom. The investigation surrounds concerns about AWS and Microsoft Azure's duopoly, which might limit competition in the market.