Public cloud, ushering in a new era in public sector in the UK

Among the various initiative that the United Kingdom has taken in the recent past to make
itself future ready, adoption of Cloud computing technology has been at the forefront. With
the intention of repeating the success of large corporation in reaping the benefits of this
technology, the British government has come out with several policies over the years to
promote the absorption of this technology in its departments as well as in small and
medium scale organisations. These initiatives that have so far resulted in massive growth in
this industry has also delivered on cost and energy savings as well as increased flexibility in
operations in government as well as non-government institutions in the country. Public
cloud services segment in particular within the larger cloud computing sector has seen
greater success compared to private cloud and hybrid cloud segments, commanding nearly
50% market share of the total cloud computing market in the UK.
Pivoting on innovation to deliver on cost and service efficiency
Cloud computing technology has over the year proven to be a very efficient technology in
creating value for its user organisations. It has so far proven that it can deliver efficiency in
streamlining of processes, providing greater workforce flexibility by allowing them to work
remotely and more efficient use of existing enterprise resources. Its adoption in general
lowers the requirements of investments in software as well as expensive ICT equipment
while deriving greater efficiency from the existing ones. However, the most important
benefit that is being derived from this technology is in massive energy savings. Using large
scale centralised servers and data storage devices instead of decentralised systems have
helped organisations adopting cloud technology to lower their carbon footprint while
significantly increasing their scale of operations.
In order to pivot on the above aspects of this innovative technology, the British government
took several early steps between 2010 and 2013, to adopt and absorb this technology to
improve the process of governance delivery to its citizens.
The UK’s First Cloud Policy
In order to promote cloud computing technology absorption in government departments,
the British government adopted a cloud first policy in 2013. This policy mandated that all
government institutions would first consider cloud solutions while procuring any new or
existing services, before any other options are considered. Further while choosing
appropriate cloud solutions priority must be given to public cloud solutions, rather than
private or hybrid cloud solutions. The policy mandate, also clearly states that the overriding
consideration in conducting this exercise is to derive better value for money in “securing the
best mix of quality and effectiveness for the least outlay over the period of the use of the
goods or services bought”. The above policy thus gave the much-needed initial thrust to the
cloud computing industry in the country, making it the fastest growing and the largest in
terms of market value in Europe.
The policy was again re-evaluated in 2019 when it was decided that no change in it was
required as of that date as there was much more value yet to be derived from this
technology. This reaffirmed the government’s view that cloud computing was the most
preferred avenue the UK wants to reckon to adapt to the fast-evolving competitive
technology environment and to modernise its ICT infrastructure.
In this regard the government also came out with a G-Cloud initiative, to streamline the
process of procurement of Information technology and cloud computing services for
government bodies. The framework consisted of a series of framework agreements that
public organisations may use to procure cloud services without going through a full
tendering process. The initiative also led to the establishment of a “Digital Marketplace”
where vendors can showcase their products and public sector bodies can search and
procure cloud services as per their requirements.
Appropriate regulatory framework has also been created in the country to promote fair
business practices in this sector. The Network and Information System (NIS) Regulations
adopted by the British parliament in 2018 and the UK Data Protection Act 2018 (DPA) and
EU General Data Protection Regulation (GDPR) are two important legislations in this regard.
These legislations regulate the rights and liabilities of vendors and users of cloud services in
the UK as well as provide a legal framework for collection and storage of personal data and
privacy protection.
The above-mentioned policy and regulatory framework along with the G-Cloud initiative
became the driving force for the faster acceptance and absorption of cloud computing
technology in the non-government sectors as well, making the country the largest Cloud
computing market in Europe. The policy also continued to be the primary catalyst driving
investment in this sector making UK the most preferred Tech VC destination in Europe.
The pandemic impetus
The advent of the COVID-19 pandemic forced upon everyone to transform and adapt to an
extremely perilous global health emergency which brought the world to a grinding halt. The
challenge was not only to contain the contagious virus but also to prevent business activity
and public service systems from collapsing. While health authorities were doing their part,
companies, non-corporate institutions and governments were busy finding innovative ways
to maintain business continuity. This was the time when the UK saw the maximum uptake of
cloud services which had emerged as the most preferred solution to deal with this problem.
Work from home became the new norm and the demand for IaaS (Infrastructure as a
service) and SaaS (Software as a service) witnessed an exponential growth. This sudden rush
to implement cloud solutions mainly drove demand in the public cloud segment of the cloud
computing market and marginally in private cloud and hybrid cloud segments. The primary
drivers for this surge were the small, medium enterprises and government departments
who have been fence-sitting till now but were now forced to adapt due to the new
pandemic infested operating landscape. These organisations with limited resources and
unlike large corporate couldn’t implement private or hybrid clouds thus leaving them with
public cloud-based solutions as the only option to fall upon.
In a survey conducted in UK by Centrify, a US based cloud services provider as much as 51%
of the business leaders who were interviewed stated that they were able to prevent their
businesses from collapsing by implementing cloud computing-based business models. The
same survey also pointed out that nearly 60% of the respondents were planning to increase
their cloud spending even after the pandemic as it has substantially increased their IT
structure efficiency. Adoption of cloud computing has helped these organisations to be
more flexible, efficient and their employees more agile, which they now believe will help
them to significantly scale up their businesses. Governments and financial institutions also
found out that cloud was a great enabler in times of crisis, when delivery of critical public
services and distribution of stimulus funds in the traditional way became challenging.
Teething troubles
Transitioning into Cloud computing has not been without glitches for organisations. In the
past couple of years as the uptake of this technology has increased so have the instances of
phishing attacks and data theft. While concurrent measures are being taken to contain
these threats, all stakeholders. be it users or service providers admit that cloud computing is
an evolving space and still has a long way to go before it matures. Hence, the best way to
deal with the current teething problems is to have a dynamic approach while dealing with
security.
Another major area of concern while implementing public cloud is that of service
dependability. Since using any of the cloud computing services involves having un-
interrupted access to vendor networks any disruption could cause millions of pounds worth
of losses to the users. Currently both corporate and government users in UK use a multi-
vendor strategy to deal with this problem. However, this is not an option that would work
for the long run, as there will be difficulty in streamlining of processes when using multi-
vendor products.
The above discussed shortcomings in the current state of cloud technology and a myriad of
other problems lead to an un-necessary escalation to user costs and lowering of efficiency.
Though, they are expected to wither away in the medium to long run, but currently they are
the major reason why many businesses and other institutions are still reluctant to adopt
cloud technology solutions.
The service providers on their part are also working overtime to find effective solutions for
these issues. Lee- Martin King – Northern-Europe commercial sales director of AMD while
speaking at “Tech Monitor public sector technology symposium 2021” cautioned that
businesses planning to implement cloud technology must plan in well in advance as
efficiently as possible, if they intend to reap its maximum benefits. Further speaking on the
cyber security issues being faced by current users, he stated that new chip level innovations
are taking place in his company and elsewhere which will effectively deal with these
problems in the near future.
The UK is now the third largest Cloud market in the world.
The British cloud computing market is currently the largest in Europe and the third largest in
the world after the United States and China. While the country is host to more than 100,000
companies providing cloud services, the leaders in the market are Amazon web services
(AWS), Microsoft Azure and Google cloud. The total revenue generated by all the service
providers in the year 2020 amounted to around $12 Billion, with a major chunk coming from
public cloud services. The country is also the third most attractive destination in the world
for Tech venture capital investments after United States and China, attracting nearly $21
Billion in 2020 when the markets were most challenging.
The British governments enabling policy has been one of the major drivers behind the
success of cloud computing in the country. Since 2013 when the cloud first policy was
launched, the country has come a long way, in enacting various regulations and
procurement policies that would see the industry scale new heights and bringing down the
barriers to adoption. However, there are still a number of areas where attention needs to
be focused. The first one is, that British market is dominated by three major US service
providers, AWS, Microsoft Azure and Google cloud. Despite the country being home to
more than 100,000 companies providing service in this field, none have the scale to take on
their American rivals.
The second is the establishment of sovereign cloud capacity. Various countries including
many from the EU are actively contemplating secured cloud capacities where sensitive
information relating to defence, citizen personal data, critical government records are to be
maintained. This is an area which will see significant government spending taking place in
near future with appropriate standards of engagement and procurement for the potential
vendors.
In a report published by UK Parliament post in June 2020, it as been estimated that cloud
computing market in the UK is expected to be worth $42 billion by the year 2023. The report
also stated that public cloud services would continue to see greater adoption ahead of
private and Hybrid clouds as more and more data would continue to be stored there. The
report also pointed out that one of the major challenges faced by companies in the
successful adoption of cloud computing technologies is the lack of adequate manpower in
the country with appropriate knowledge and skillsets.
Future
The UK has built itself a very strong cloud computing ecosystem, thanks to the early
enabling measures taken by the government. Organisations, be it private or government will
be able to pivot on this capability to achieve greater flexibility and operating efficiencies.
Public cloud would continue to be the backbone of this industry achieving higher scales as
existing bottlenecks are gradually eliminated.

References
1. POST-PN-0629.pdf (parliament.uk)
2. • Public cloud: largest markets globally 2019 | Statista
3. Sovereign Cloud | Oracle India
4. What Is the UK Government’s Cloud First Policy and What Does It Mean for Public Sector
Bodies? | RingCentral UK Blog
5. United Kingdom Cloud Services Market (trade.gov)
6. Government Cloud First policy - GOV.UK (www.gov.uk)
7. Managing your spending in the cloud - GOV.UK (www.gov.uk)
8. Cloud adoption saved half of UK businesses from COVID-19 collapse -
(enterprisetimes.co.uk)
9. Cloud adoption saved half of UK businesses from COVID-19 collapse (centrify.com)
10. Public Sector Cloud Offerings | UKCloud
11. Cloud Computing and Data costs to be covered under expanded R&D tax credit (techuk.org)
12. How the UK public sector is migrating to the cloud - Tech Monitor
13. The largest ever UK public sector cloud transformation unlocks cost savings and innovation |
PublicTechnology.net
14. Public sector cloud adoption | Deloitte Insights