UK.gov shakes hands on cloud agreement with 'non-cloud service provider' HPE

'The world is hybrid,' the enterprise tech goliath keeps saying


HPE has inked a Memorandum of Understanding (MoU) with the Cabinet Office in what the firm itself described as a "significant departure from the Cloud First policy" initially adopted by the British government in 2013.

Under the framework agreement – part of the Government Cloud Computing strategy, a joint initiative between the Cabinet Office, Crown Commercial Service (CCS) and Government Digital Service (GDS) – public sector buyers will get access to pre-approved discounts.

HPE joins fellow "cloud clubbers" UKCloud, Google, Microsoft, and IBM, with AWS expected to join the fold soon.

"We think this will represent a significant departure from the Cloud First policy as we are the first non-cloud service provider to sign up," a spokesperson at HPE told us.

Effective immediately, the MoU agreement allows "qualifying public sector bodies" to benefit from minimum agreed discounts on certain HPE technologies, including HPE GreenLake cloud services, Aruba enterprise networking and security offerings, and the firm's storage and compute products".

Sue Preston, GM at HPE Pointnext UK&I, told The Register the pandemic had driven digital "transformation". Speaking about the freshly signed MoU, she added: "With the view of hybrid becoming the new norm... [the deal] will allow [government] to address some of the heritage workloads under a single pane of glass."

Preston told us the government sees "heritage workloads" as the biggest challenge to the adoption of public cloud, adding: "I'm still seeing on-prem traditional data centre procurement – so it's a mix."

She said the deal "positions HPE well with the CCS on the hybrid approach" and that there "are a lot of 'cloud-first' strategies even outside of public sector" HPE believes its edge-to-cloud hybrid product set could address.

An industry source told The Reg they thought the MoU cloud deal was "great for HPE", but added that they saw it as "another financed kit sale".

Cloud what-now?

The Cloud First policy was the advice given to public sector buyers in 2013 when the second iteration of the Digital Marketplace was established under the G Cloud strategy intended to guide purchases.

It has been over a year since the government first hinted, via guidance for the National Audit Office (NAO) on cloud services [PDF], that its public seven-year-strong Cloud First policy was under review.

In October last year, however, GDS's head of technology policy and lead tech advisor stated in a somewhat confused statement titled "Cloud First is here to stay" that although users including the Ministry of Defence "have a hybrid, multi-cloud strategy... we found that the Cloud First policy has strong 'brand recognition' across government and that changing its name or content would not be beneficial to users."

It added "organisations understand Cloud First is not cloud only" and that the "detail of the policy" was that it "enables organisations to form a cloud strategy that's right for them" – including no cloud at all or hybrid kit.

It's a very interesting way to position it, like a "Meat First" brand that embraces vegetarians.

Our industry source told The Reg: "There are lots of government departments that bought private cloud – against the Cloud Policy – but years later still do not have a functional cloud, because buying kit and running a cloud are different things.

"As always with government you would never believe the madness of one side doing one thing, then the other undermining the other. You would have thought a proud 'non-cloud' provider signing an MoU would be madness!"

The Register understands, via sources close to Crown Commercial Services, that Minister of State for the Cabinet Office and HM Treasury Lord Agnew is driving the new policy.

A Cabinet office spokesperson told The Reg: "Cloud services are often the best and simplest option, offering security and value for money, and that's why we published the Cloud guide for the public sector in March this year. Our Cloud First policy does not preclude other options for storage."

Have a swim in our cool GreenLake

All this will be sweet, sweet music to HPE, which told us: "HPE GreenLake consumption-based services is a big part of [the MoU deal], focused on bringing the cloud experience to on-prem. We see this as government accepting that the world is hybrid."

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GreenLake, introduced at the tail end of 2017, is the firm's on-premises managed computing service, and the consumption model is analogous to the pay-for-what-you-consume converged infrastructure template. GreenLake includes servers, storage, networking, the OS, hypervisor, applications, and services.

The new MoU sees public sector customers able to procure HPE GreenLake cloud services with delivery promised from "order to run in as few as 14 days".

The enterprise goliath last week filed numbers for its UK arm for the year ending October 2019, showing declining revenues in its UK ops. The reporting segment – although it was echoed in its wider results – preceded a slowdown in enterprise spending on servers, storage, and networking in the post-COVID-19 world.

Previously the US vendor told us it wants to sell its entire portfolio as a service by 2022, but has work to do to get there as just 5 per cent of its gear was sold under services contracts in 2018. HPE's Preston told The Reg the firm's move to sell as-a-service incorporated both its public and private contracts, on everything from edge to cloud – with its Aruba kit at the edge – by 2022.

She also spoke of the latency improvements expected from HPE's hybrid services. GreenLake differs from public cloud providers like AWS, Azure, and Google Cloud in that it doesn't charge for data egress, for example, and boasts some latency efficiencies.

There's a lot at stake for HPE with regards to hybrid kit succeeding in a wider context. The firm's "hybrid IT" division accounted for 81 per cent of the HPE's 2019 revenues [PDF].

The messaging is consistent. HPE has insisted for a while that it can see off competition from AWS and its cohort by pushing a combination of edge computing and hybrid services, with CEO Antonio Neri telling The Reg in an interview late last year that enormo-tech firm AWS's unveiling of its own hybrid IT service, Amazon Outposts, was a clear confirmation that AWS "has finally recognised the world is hybrid".

Hardware giant Dell and software-slinging daughter firm VMware also sell a service – unveiled in April 2019 – where customers can rent Dell EMC-built IT infrastructure on-premises without having to buy it.

Just last week, Cisco CEO Chuck Robbins confessed to plans to sell everything as a service: "We're even looking at how we deliver our traditional networking hardware as a service over time."

The main rule about cloud club is that you talk about cloud club... a lot

It was seven years ago, during the third rejig of the historic G-Cloud supplier framework, that the Cabinet Office first hauled out its "Cloud First" policy, mandating procurement heads in central government to favour the fluffy stuff when spending Brits' tax money on tech. The policy was supposed to kill off old-world buying habits. However, seven years later, the public sector is still buying on-premises kit.

The current framework within which the vendors are signing MoUs is part of the One Government Cloud strategy, launched this year, which involves the Cabinet Office, its buying arm CCS, and GDS in workshops "to show the cloud industry and departments that we are working cross-government in a coordinated way" and help support the civil service in its "digital transformation" away from "legacy technology".

Under the policy, buyers are asked to look at the cloud before they decide to upgrade their on-premise infrastructure. However, even GDS's lead techie noted, just a few months back, that the department's "user research has found that a number of organisations have only just started... to develop their cloud strategies." ®


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