The UK's HM Revenue & Customs (HMRC) tax agency is looking for a hyperscaler partner for its planned data center exit.
In a planned procurement notice published on March 21, the department said that it is looking for a hyperscaler to manage the "migration of servers from the current on-premise solution to the hyperscaler's cloud environment."
As first reported by Public Technology, the contract is valued at an estimated £500 million ($649.5m) and will run for 10 years, between April 1, 2026 and March 31, 2036.
The department estimates that it will publish the tender on May 1, 2025, at which point hyperscalers interested can apply for the project.
The notice states that the primary objective of the Data Center Exit program is to exit "three Fujitsu-hosted data centers and migrate associated services to new destination platforms."
Fujitsu operates data centers across the UK; one in the Docklands, London; another in Stevenage, Hertfordshire, with 3,688 sqm (39,697 sq ft) of floorspace across six data halls that opened in 2010. The third facility is in Thurrock, Essex, offering 5,100 sqm (54,895 sq ft) of floorspace across four data halls.
HMRC expects that the contract will be awarded to a single hyperscaler, though "acknowledges that hyperscalers may wish to sub-contract elements of the service delivery, but it is mandatory that the contracting entity is a capable hyperscaler who will manage the migration and hosting from the current on-premise solution."
Once the data centers have been exited, the hyperscaler will "provide cloud hosting capabilities for in-scope services in a secure cloud environment to ensure continuity of services,” and must be able to "provide a platform capable of sustaining business change, as well as mitigating current security and resilience concerns.”
HMRC has long been seeking to migrate to the cloud. The department previously contracted IBM to help it exit the Fujitsu data centers, at the time with an aimed exit of June 2022.
In 2021, HMRC said it had “600 services hosted on over 7,000 servers in legacy data centers.” The organization's FY2024 annual report stated that by the end of 2023/2024, HMRC had "successfully migrated 372 of 545 critical services, with 49 remediated."
As of August 2024, the department said it was around 70 percent through the migration effort.
Earlier this year, reports emerged that HMRC has spent £3.8 billion ($4.67bn) on contracts with tech suppliers over the last five years, of which £591 million ($726.85m) excluded competition, all of which was on top of the £10bn ($12.3bn) Aspire agreement which was intended to be completed by 2017.
Fujitsu, the operator of the data centers HMRC is seeking to exit, has seen a troublesome few years in the UK.
The company is notoriously behind the Post Office's error-ridden Horizon system, which led to around 900 post office branch managers being wrongly prosecuted during the 1999-2015 period, with at least 102 of those convictions overturned by March 2024. The Post Office has thus far paid out £86m ($109.4m) in compensation.
