With the government’s announcement that it has launched the third round of procurement for its cloud initiative, G-Cloud iii, many industry watchers have been speculating on the success of the previous two frameworks and what could be improved upon to further break down those cumbersome, expensive, traditional IT contracts that the public sector is so used to dishing out.
No-one can deny that the G-Cloud has been a huge step in the right direction for the public sector’s use of cloud services. However, since the initiative launched less than a year ago, the government has spent just over £4 million trhough the G-Cloud (less than 0.5 percent of overall government IT expenditure). It is obvious that more work needs to be done to convince departments and local authorities that public cloud is the easiest, cheapest and most effective way to procure services.
One of the benefits of the G-Cloud is that the government runs a procurement every three to six months, which allows for feedback to be given by users, and for changes to be made accordingly next time round. So how is the G-Cloud team doing on its third time entering this phase? Despite being low on resources, Computerworld UK understands that the team has achieved a lot in 12 months, but there is still a significant amount of work to do.
A ghetto for SMEs?
Since its launch, those keeping an eye on the G-Cloud have been speculating whether or not Amazon and Google, two giants in the public cloud arena, will eventually be signed to the framework. Shortly after the first G-Cloud framework went live, director of the initiative, Denise McDonagh, said that she ‘fully expected’ Amazon to be on the framework in the near future. However, the second framework came and there was still no sign of either supplier.
Computerworld UK spoke to Joe Dignan, chief analyst at Ovum, who believes that it is essential to get the incumbent cloud providers on the G-Cloud.
“I think before this is going to be taken seriously, they at least need Amazon on there. I know the Cabinet Office is very keen to get both Amazon and Google on there, because what they don’t want is the G-Cloud to become an SME ghetto,” said Dignan.
“It has got to be seen as the primary procurement engine, and without those guys, it is becoming that SME ghetto.”
Dignan argues that the problem for these suppliers is that not enough sales are being made through G-Cloud to make it a credible option. Some might point to Salesforce.com and argue that this isn’t the case; given it is a cloud heavyweight and it signed in the second round of procurement. However, Dignan argues that Salesforce.com did this because it wants to be seen as being cooperative with the public sector, not because it expects much business through the G-Cloud itself.
“The issue for Amazon is that they have no interest in developing a public sector specific proposition – they see it as a commodity item. To make it work for them they need scale, and there just isn’t the scale through Cloudstore at the moment that allows them to use their low profit margin, commodity model,” said Dignan.
“They need to convince some large departments to purchase some big-time bundles of cloud and that will bring in the big boys.”
However, not everyone agrees. Simon O’Kane VP of Enterprise at British-born SME Huddle, which has arguably been the most successful supplier on the G-Cloud, believes that by including the likes of Amazon on the framework takes away from the government’s agenda of giving more IT work to SMEs and not traditional vendors.
“There were a lot more companies on the catalogue in the second iteration (458, versus 257 first time round) and a lot of those were the more traditional IT vendors – the big SIs, software and hardware companies. The original vision for the G-Cloud framework was to promote genuine cloud services and value for government, as well as SME business,” said Kane.
When asked if he thought that by allowing Amazon and Google onto the framework this would isolate the SMEs, such as Huddle, Kane replied “yes”.
“I think it adds more confusion in terms of what message the government is trying to send out. If the message is that it wants to promote SME companies, especially UK-based ones, doing this will dilute it. Looking at the catalogue recently I saw a lot of the old names with multiple entries,” added Kane.
Sales and Procurement teams are scared
Ovum’s Dignan also believes that if the G-Cloud is to succeed, there needs to be further changes made in the internal government procurement teams and the vendor sales teams. Dignan has been made aware of some rather unsavoury practices being carried out in the public and private sector that could ultimately prove to be the nail in the G-Cloud’s coffin.
“I was talking to one major government department who said that they were about to buy services off the Cloudstore, but were then offered a better deal not to purchase through it. This is because the sales person wasn’t going to get a penny if the department bought if off the cloud framework,” said Dignan.
“It is entirely up to the vendors themselves to get their act together to make sure these guys are incentivised for sales that come off the Cloudstore. If this happened they would then be happy to push it. The Cabinet Office should also be encouraging the vendors to make these changes to their internal processes.”
He added: “It’s a threat they need to sort out pretty damn quickly.”