The Post Office Scandal: Drawing parallels between Horizon and the UK cloud market

With the ongoing fallout from the Post Office scandal, questions are being asked about whether the UK government looks set to repeat the mistakes of the past based on its reliance on the cloud technologies of several major US hyperscalers

Nicky Stewart

Published: 08 Feb 2024

Fujitsu’s decision to stop bidding on public sector contracts until the conclusion of the public inquiry into the Post Office Horizon IT scandal, in which the Japanese supplier is implicated, is the right thing for the company to do. However it does not absolve the firm in any way, and there are still many unanswered questions that Fujitsu needs to address.

Paul Patterson, the European director at Fujitsu, admitted to MPs recently the company had remotely accessed the Horizon terminals of sub-postmasters, which is something that had long been denied by everyone in charge.

Former Fujitsu UK CEO Duncan Tait has even since admitted that he described Horizon as “Fort Knox” to the then Post Office boss, Paula Vennells, which begs the question: how could Fujitsu’s reassurances have gone unchallenged for so long?

There is understandable incredulity that the Fujtisu Horizon software system is still in use and partly funded by taxpayers. The reality is that, as a country, we remain stuck with Horizon until 2025 – because it has proven to be too old, too complex, and too bespoke to move to the cloud.

Horizon is a creature of its time, and clearly never built on the open standards and interoperability that are the mantras for technological choice and flexibility today.

And it is hardly surprising – in the wake of the Post Office scandal – that people are asking questions about Fujitsu and why it remains a “strategic supplier to government” – and one of an elite few that can boast huge annual revenues as a result of its dealings with the UK government.

The reasons for Fujitsu’s ongoing success in the public sector marketplace are complex. Many contracting authorities are locked into proprietary technology like Horizon that cannot be modernised, for one thing.

Despite a concerted effort to improve its commercial and technical skills, the government does not yet have all the resources it needs to move away from its outdated systems – or to modernise and reform its supply base.

Government set out on its journey to the cloud with optimism more than a decade ago, thinking cloud would be the silver bullet that would release it from the grip of companies like Fujitsu. Cloud would be consumed as a commodity and cloud providers jettisoned on a whim.

In fact, the reverse has proven to be the case. Many cloud platforms share some of Horizon’s characteristics. Notably proprietary technology (that when coupled with exit penalties) can lock customers into the platform in perpetuity. Ironically, the cloud platform the Post Office tried and failed to migrate Horizon to was one of these proprietary platforms.

The Competition and Markets Authority (CMA) is currently investigating the impact of cloud provider lock-in, be that through proprietary technology, exit penalties, discounts based on term/volume commitments or unfair software licensing practices.

Despite the CMA investigation, two of the world’s major cloud vendors, Microsoft and Amazon, are deemed “strategic suppliers to government”. Between them, both companies have amassed public sector cloud hosting contract spend to the tune of billions of pounds. None of this business has been competed.

The net result is a cloud monoculture made up of Microsoft and Amazon, meaning much of the nation’s most critical and sensitive data now resides on their platforms. Most of the economic benefit of the government’s ever-increasing cloud spend will go off-shore – to the detriment of the UK’s own cloud hosting industry.

Above all, the monoculture also amounts to a single point of failure that could have catastrophic consequences if subjected to a major cyber or physical attack.

This is not a call to the Luddites to come out and smash up the looms. We need cloud. We need its agility and scale in this ever more data-driven world.

Government mostly made a mess of buying its legacy systems and its making a mess of buying cloud. This is a plea to the government not to repeat the mistakes of the past.

It needs to ensure its data-driven digital markets are resilient, vibrant, diverse and competitive and it needs to ensure that its officials are properly equipped to support such a market. Because the next shiny new thing on the horizon is artificial intelligence (AI).

No supplier should ever be allowed to have a monopoly on AI in any sector. The prospect of an unaccountable AI becoming the next Horizon, with its lies, cover-ups and destruction of lives and livelihoods, is terrifying.

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