Cabinet Office terminates £9m Microsoft deal
But does not derail overall migration plans
The UK's Cabinet Office has terminated its £9 million contract with Microsoft, halting its migration away from Google Workspace to Microsoft 365.
The termination, less than 10 months into its planned three-year term, was confirmed by the Cabinet Office through amendments made to a commercial notice.
"Following the completion of the Discover phase of this contract and after careful consideration, The Cabinet Office has taken the decision to exercise its right to terminate the Contract under Clause 18.1 of the Terms and conditions," an updated official procurement notice released this week stated.
The Microsoft contract was part of the broader Falcon IT Platform Refresh and Migration Programme, a £50 million initiative aimed at modernising and streamlining the government's IT infrastructure.
The Falcon programme comprises two primary workstreams: the creation and implementation of a new cross-departmental IT system for accessing data and documents classified at the Official level, and the migration of users and data from Google Workspace to Microsoft's M365 technology.
Last year, the Cabinet Office enlisted IT services giant Capgemini as the technical partner for the Falcon programme, and Microsoft as the migration partner.
The project aimed to migrate approximately 15,000 users, including ministers and senior civil servants, to the new software.
The decision to halt the migration process comes after Microsoft completed a proof of concept and framework design for the new system.
While Microsoft received approximately £1.87 million for delivering the discovery phase, the total expenditure would have exceeded £9 million had the contract run its full course.
Despite termination of the contract, the Cabinet Office remains undeterred in its plans for a wholesale switch to M365, aiming to align with central government standards and enhance collaboration opportunities.
A Cabinet Office spokesperson clarified that the termination of the contract does not derail its overall migration plans. They added that a "planned pause" was always on the agenda, so the Cabinet Office could submit a full business case and integrate learnings from the initial phase.
The Cabinet Office is now reviewing options to proceed with the migration workstream.
The spokesperson underscored the importance of fully embedding all work and learnings before advancing to the next stage of the project.
Capgemini, retained as Falcon's technical partner, will prioritise the delivery of the new official IT system, leveraging insights from the completed discovery phases.
The formal timeline for completing the Falcon programme is set for March 2025, with provisions for a one-year contingency beyond this date.
Meanwhile, the Cabinet Office's existing deal with Google for core software licenses is slated to conclude in September 2024.