UKCloud cuts cloud storage pricing for public sector customers and sticks boot into US rivals

UKCloud claims cutting the price of its off-premise storage service by 66% for large-scale public sector users marks out its offerings as “significantly” cheaper to use than those of its US counterparts.

The public sector-focused infrastructure as a service (IaaS) provider began phasing in the price cuts from 1 January 2017, which will see large-scale users of its cloud storage service charged 1.5 pence per GB per month, equating to a price drop of around 66%.

Smaller-scale users, meanwhile, will see the cost of storing data in the company’s cloud drop by around 80%, from nine pence per GB per month to two pence.

The company, which changed its name from Skyscape Cloud Services to UKCloud in the summer of 2016, claimed the price reductions were made possible by its decision to overhaul and replace the infrastructure underpinning its services with hyper-converged technologies.  

As a result, UKCloud said the company is now able to operate at economies of scale that not only allow it to drop its prices, but, in some cases, “significantly” undercut its US-based public cloud rivals.

In a statement, Simon Hansford, CEO of UKCloud, said the timing of its price cuts is fortuitous given that some US cloud firms – including Microsoft - face having to charge UK firms more because of Brexit-induced currency fluctuations.

“While we’re now well known for introducing price cuts on a regular basis, our tenth wave of reductions coincides with cost increases from other providers, most notably US corporations,” he said.

“This means that not only are our services genuinely UK sovereign and as such, our customers’ data is never subject to far reaching foreign data privacy issues, but they are also more cost competitive than ever before.”

The firm is also poised to drop the price of its VMware-based Enterprise Compute Cloud (ECC) services from 1 February 2017, collectively marking the tenth round of reductions UKCloud has introduced to date.

As such, large-scale ECC users should benefit from a 43% price reduction, meaning a virtual machine that previously cost £1.05 an hour to run will now cost 60 pence.

UKCloud has emerged as one of the biggest beneficiaries of the UK government’s G-Cloud procurement framework since its introduction in 2012, as the company has sought to roll out security measures and service offerings tailored solely to the use cases of public sector providers.

This has paved the way for the company to secure cloud deployment deals with various central government departments, including the Department for Work and Pensions and the Home Office, as well as regional police forces, local councils and health trusts.

Joanna Smith, CIO of the Royal Brompton and Harefield NHS Foundation Trust, said the falling cost of cloud services can make it easier for IT departments to make the business case for using off-premise services.  

“The business case for using cloud is continually strengthened as additional price reductions are realised. This reduction of storage costs, made possible by UKCloud’s continued growth and scale, have the potential to deliver immediate savings and increase value,” said Smith.

The company’s decision, however, to draw attention to the fact its services may work out cheaper for public sector users than those offered by some US cloud firms is notable, particularly in light of Amazon, Microsoft and Google’s recent UK datacentre launch announcements.

As the number of US cloud firms seeking to build out their UK datacentre presence has increased, analysts and market watchers have been quick to suggest this could result in home-grown providers losing out on public sector cloud deals in future.

Indeed, public sector analyst house Kable warned back in March 2016 that once Amazon and Microsoft are in a position to offer locally-hosted cloud services, incumbent G-Cloud suppliers could see demand for their offerings via the Digital Marketplace start to soften.

“So far, the UK public sector cloud, particularly in the G-Cloud space, has been seen as an SME-rich ecosystem. Now, the cloud giants are starting to build UK datacentres: Microsoft, Amazon Web Services [AWS] and Oracle,” said Jessica Figueras, chief analyst at Kable, at the Think Cloud for Government Conference around this time.

“This is going to be seriously game changing. These giants will start to enter into the market, and we’re yet to see how much of their business they put through G-Cloud, but this is going to seriously change the landscape.”