UKCloud secures £25m funding from Digital Alpha Advisors - Cisco’s investment arm

Profile picture for user ddpreez By Derek du Preez March 17, 2019
UKCloud has been one of the UK tech sector’s greatest success stories in recent years, providing cloud infrastructure to the public sector.

Simon Hansford, CEO UKCloud
Simon Hansford, CEO UKCloud

UKCloud has always had a razor sharp focus in understanding the value it offers - a multi-cloud platform specifically for the UK public sector. Its cloud platform was one of the early success stories of the G-Cloud framework, highlighting that government buyers were keen to purchase cloud technologies from UK suppliers that understood the specific needs of government and could also guarantee data sovereignty requirements. They just needed a procurement mechanism to enable that.

In recent years UKCloud has continued to expand and has refined its offering with the launch of UKCloud Health and UKCloudX. The former offers specliaised services to the Health and Life Sciences community, whilst the latter targets the unique requirements of the UK’s Defence and National Security organisations. UKCloud understood that it has a niche that the likes of AWS and Microsoft couldn’t necessarily compete with at scale - a specialist offering that caters to the needs of the UK public sector.

And an announcement today that Digital Alpha Advisors - an investment firm that has a strategic collaboration with Cisco Systems - is investing £25 million in UKCloud will be seen as a big win for the cloud provider.

The funding will be used to “support the enhancement and expansion of teams and technologies behind the UKCloud multi-cloud platform”, as well as strengthen the “alignment with networking leader Cisco in the UK”. Cisco will have a new route to market with UKCloud, through joint sales and marketing activities, the companies said.

The announcement received praise from the government’s Minister for Digital, Margot James, who said:

“We are committed to making the UK the best place to start and grow a digital business and I’m delighted to see UKCloud attracting funding from international investors to scale up their operations.

“This is another vote of confidence in our talented sector and will help us maintain our reputation as the leading destination in Europe for inward investment.”

CEO of UKCloud, Simon Hansford, said that the investment will enable UKCloud to continue to scale out its multi-cloud platform. He said:

“Digital Alpha Advisors shares our vision for digital transformation and are making a significant £25m investment to help scale out our multi-cloud platform, capabilities and expertise which make it safer and easier for organisations in the UK to harness the potential of cloud.

“The investment will intensify our collaboration with Cisco, who shares our focus and commitment to create secure national infrastructure to underpin and accelerate digital transformation of services across our nation. And our capability dovetails perfectly with Cisco’s strategy.”

Digital Alpha Managing Partner Rick Shrotri said that UKCloud is set to continue to take advantage of the UK public sector market, which is “ripe for rapid growth due to the low levels of cloud penetration”.

My take - Looking ahead

I’ve followed UKCloud closely for a number of years and the firm has benefited from a number of key differentiators:

  • An executive team that understands the requirements of the UK public sector, one that is embedded within buyer communities
  • An understanding that it needs to specialise to differentiate from the US giants - its launch of UKCloud Health and UKCloudX cemented this strategy
  • Being UK-specific and being able to satisfy data sovereignty requirements often makes it an easier choice than other cloud providers (particularly within the context of US data sharing concerns, GDPR and Brexit)

That’s not to say that UKCloud doesn’t have its challenges - some departments within Whitehall and some senior leaders continue to be obsessed with the likes of AWS and Microsoft. However, its strategy has been unwavering, meaning that it has continued to have a compelling proposition.

And although cloud has seen growth in Whitehall in recent years, the penetration levels across the wider public sector are still minimal compared to the actual opportunity available. This is particularly true of the NHS and local government, which still have lots of cloud investment decisions to make over the coming years. And I would suggest that this is what Digital Alpha Advisors is banking on.