‘Significant exposure’: Amazon Web Services outage exposed UK state’s £1.7bn reliance on tech giant | Amazon

Amazon CEO Andy Jassy was all smiles when he met Keir Starmer on Downing Street’s lawn in June to announce £40bn of investment in the UK. Starmer was there equally enthusiasticgushed: “This deal shows our plan for change is working – bringing in investment, stimulating growth and putting more money into people’s pockets.”

Four months later, the tech company was left scrambling to fix the devastating global outage that left thousands of businesses in limbo on Monday and shed light on the UK government’s dependence on cloud computing business Amazon Web Services (AWS).

Figures compiled for the Guardian show that the British state is increasingly reliant on the services of the US internet giant, which has also been criticized by unions and politicians over working conditions in its logistics and internet retail business.

AWS has won 189 contracts worth £1.7bn with the UK government since 2016; It billed around £1.4bn during that period, according to figures compiled by Tussell, a public procurement intelligence firm.

The research group added: “35 public sector authorities currently use [AWS] Services under 41 contracts worth a total of £1.1bn. Key ministerial departments have contracts with the company such as Home Office, DWP, HMRC. [the Ministry of Justice]Cabinet Office and Defra.

Tim Wright, technology partner at law firm Fladgate, said: “This is a very important revelation and quite ironic considering the FCA’s position. [Financial Conduct Authority] and PRA [Prudential Regulation Authority] For several years, we have repeatedly highlighted the dangers of concentration risk in cloud service delivery for regulated entities.

“Recent moves by HM Treasury, the PRA and the FCA to provide direct oversight of ‘critical third parties’ are aimed at addressing precisely the kind of disruption risks to which AWS is exposed, but until there is significant diversification or dominant cloud adoption, the UK government’s own stance stands in troubling conflict with the principles of resilience espoused by regulators.”

The House of Commons’ treasury committee has written to the Treasury’s economic secretary, Lucy Rigby, to ask why the government has not yet designated Amazon as a “critical third party” for the UK’s financial services sector; This would expose the technology firm to financial regulatory scrutiny.

Meg Hillier, chair of the committee, said Amazon recently told the committee that its financial services customers use AWS to support their “resilience” and that AWS offers “multiple layers of protection.”

More than 2,000 companies worldwide were affected by this week’s outage, according to Downdetector, a website that tracks internet outages; There were 8.1 million issue reports from users, including 1.9 million in the US, 1 million in the UK, and 418,000 in Australia.

Among UK government contracts, only HMRC said it was affected. The company stated that customers “had problems accessing our online services” and urged them to call back later because the phone lines were busy.

Most sites were restored after a few hours, but some experienced persistent problems throughout the day. Monday night Amazon in question all cloud services had “returned to normal operations”.

Unions, meanwhile, have long questioned whether Amazon’s track record regarding working conditions in its giant warehouses could exclude it from government contracts.

Andy Prendergast, national secretary of the GMB union, said: “Amazon has a truly terrible record of treating workers fairly.

“Shocking conditions in warehouses are leading to mass ambulance calls, with staff complaining they are being treated like robots, being worked until they drop and being paid poverty wages until workers go on strike for six months, despite being one of the richest companies on the planet.

“In this context, wasting almost £2bn of public money is a disgrace.”

AWS had no comment. A spokesperson for Amazon’s fulfillment centers said the “vast majority” of ambulance calls at its sites were “not work-related.”