Content

RESOLVED:
 
To authorise the
award of a 3 year contract with a total value of
£2,953,500.00 for the provision of a cloud hosting platform
and supporting resources via the G-Cloud Services Framework
RM1557.13 to Amazon Web Services.
 
Reason(s) For
Decision
 
The original contract was based on the
Council’s plans of a hybrid model, consisting of a mix of
cloud and on-premises infrastructure, with services migrating to
the cloud on a phased basis over a number of years. Following the
cyberattack of October 2020, however, the Council used the recovery
to accelerate the transition to the cloud and the decision was made
during the course of the contract to rebuild or recover all of the
council’s services to cloud based services, minimising
‘on-premises’ infrastructure to the greatest extent
possible.
 
Following the recovery work the Council has a
mixed cloud model, with services delivered by a number of
providers, and the legacy ‘on-premises’ data centre has
been decommissioned. The AWS platform provides hosting for a number
of key systems as well as secure integration with other cloud
services hosted by other providers. The Council now operates a
minimal ‘on-premises’ estate, primarily for provision
of internet connectivity to the Council’s officers and other
workspaces.
 
This accelerated transition to the cloud has
resulted in a significant increase in our cloud usage beyond the
original expected contract value of £1,070,000 to
approximately £2,850,000. This spend included one-off costs
related to data recovery work following the cyberattack which has
now been completed.
 
More recently, as we have reached a
significant level of cloud maturity. We have been focused on
optimising the value we receive from our cloud estate by ensuring
that the right sized resources are applied to services and
decommissioning services we no longer need such as services that
were created to handle the processing of data recovered from the
cyber attack. We have seen our cloud
usage stabilise over the past year and are continuing to actively
look for opportunities to cut the costs of running the estate
including reducing consumption based usage costs and paying for
known product usage in advance to secure discounts.
 
One Government Value Agreement (OGVA) is an
AWS pricing agreement incorporated into a Memorandum of
Understanding with Crown Commercial Services that gives the Council
access to discounted pricing subject to agreeing to contractual
commitment value based on our spend over the previous 12 month
period. This value has been calculated and the annual commitment
for the contract will be £909,800 in the first
year,  £982,600 in the second and
£1,061,100 in the third, the total contract value over the
three year term will be £2,953,500. With the use of the OVGA
agreement we can further offset the value of the contract with a
minimum of 22% discount off the standard pricing model. This would
realise savings of (£649,781) over the duration of the
contract - (£200,154) in the first year, (£216,167) in
the second year and (£233,460) in the third year). This
results in an estimated actual spend over the life of the proposed
contract of £2,303,719.
 
Alternative Options
(Considered and Rejected)
 
Moving to another cloud hosting service: since
the adoption of the Amazon Web Services cloud platform, there has
been considerable investment in configuration, deployment, training
and development for this specific platform. There has also been a
lot of optimisation work done for this specific platform to help
ensure that the best value is obtained. Given the complexities
involved in managing a cloud estate, any move to another platform
would require a significant investment of time and cost for
planning, migration and upskilling of staff, including third party
costs for software vendors to support migration of the systems they
provide and integrations.
 
Standard pricing model: utilising the Amazon
Web Services cloud services based on their standard pricing model
would provide the benefit of greater flexibility (e.g. enabling the
Council to move to another supplier or platform on shorter notice).
However, although the standard pricing model offers the flexibility
to terminate on a shorter notice, it does not offer the best value.
The estimated cost of services for the duration of the contract
would be £2,953,500 under the standard pricing model,
compared to the estimated discount under the OGVA where the cost of
these services would be approximately £2,303,719. In addition
to the discounted costs, there are additional benefits provided
through the OVGA agreement, such as free or discounted training for
staff as well as a number of social and sustainability initiatives
by the organisation.
 
Outsourcing to a 3rd party supplier (a
reseller) for Amazon Web Services cloud services: there are a
number of partners who offer cloud management services who can
provide service and support around the cloud estate. This would,
however, be contrary to the Council’s insourcing strategy and
result in the loss of value from the work that has taken place to
build our in-house cloud engineering capability (including the
training and development of our own staff).