UK Government Departments Face Increased Cloud Services Fees

31 December 2016

A recent article by Bloomberg News has suggested that government departments in the United Kingdom face increased cloud services fees as a result of Brexit – the United Kingdom’s decision to withdraw from the European Union (EU). The article suggested that the UK is currently involved in negotiations with Microsoft over their plans to increase the cost of cloud-based software used by government departments.

A referendum held on 23 June 2016 saw 52% of British voters choose to leave the EU. Since then British Sterling has seen a significant reduction in its value, losing around 17% against the dollar. As a result, Microsoft announced in October that its cloud services would increase by 22% in 2017 to offset losses.

The Common Technology Services division of the UK Government’s Cabinet Office is “negotiating with Microsoft in order to secure a pan-governmental commercial advantage for the purchase of some of these licenses,” explained the Department for Business, Energy and Industrial Strategy. Increases could cost government departments “hundreds of thousands of pounds” as they are introduced in January 2017.

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