Joe Dignan, chief public sector analyst, Ovum comments:
“The good news is that we appear to have reached the end of the beginning for G-Cloud, with the Cabinet Office reporting sales of £18.2m going through the first two procurement frameworks, G-Cloud i (Gi) and G-Cloud ii (Gii). The delay in getting G-Cloud iii (Giii) up and running is apparently due to there being 50% more suppliers and a much greater diversity of offerings. The increase in volume has caused the small G-Cloud team issues in sending out award letters.
“However, the government has finally agreed on a “public cloud first” policy. This policy is something that the G-Cloud team, led by Denise McDonagh, has championed and it is a game-changer in a number of ways. The default position of the public sector is to be risk averse, which is, to some extent, the right position to take with some of the data that it deals with. However, there is a mass of data that would work perfectly well in a public cloud model, and from now on, public sector CIOs, particularly those in central government, will have to justify why they do not adopt this model.
Progress to date: Gi and Gii
“The G-Cloud team should be applauded for progressing from a standing start to achieving £18.2m in sales by running two on-boarding exercises (Gi and Gii) over a six-month period. Some early issues have been addressed with increased ease of application and due diligence, and there is a greater diversity of services and solutions on offer. There are 462 suppliers, of which 75% are SMEs offering 3,185 services through four lots. However, the majority of contracts that have gone through have been for consultancy, and the main focus of these are Agile and cloud enablement. Given the nature of the framework, it is perhaps understandable that the early focus has been on consultancy for cloud adoption, but G-Cloud will need to be seen as the government’s primary procurement engine across the various themes, and not a consultancy framework ghetto. The exception has been the success of enterprise content collaboration company Huddle, which was an early adopter of G-Cloud’s CloudStore and is reaping the rewards in sales.
The next iteration: Giii
“Giii is not yet live, but Ovum understands from Cabinet Office sources that it has a “bumper crop” of suppliers coming through, with an anticipated 50% increase in successful applications. This means there is a concomitant increase in the diversity of solutions and services on offer, but it is critical that the G-Cloud team ensures that the increase in the number of offerings does not mean a reduction in standards. It attributes the increase in applications to G-Cloud gaining traction in the marketplace, a greater understanding of the benefits on the demand side, better marketing and communications, an easier application process, and the support of senior ministers. This support has resulted in the closure of a number of frameworks, such as Service Integration and Management (SIAM), to force procurement to be directed toward G-Cloud.
We have yet to see what suppliers are on Giii, but Ovum has been told anecdotally that a number of the large systems integrators (SIs) such as TCS have now taken a position. However, the G-Cloud team has still not managed to snare the two biggest cloud providers: Amazon Web Services (AWS) and Google. There is growing frustration with these providers’ reluctance to join one of the UK government’s flagship programs, perhaps reflected in the diminishing number of photo opportunities with UK Prime Minister David Cameron and Deputy Prime Minister Nick Clegg. Ovum understands that both companies cite the USA Patriot Act as a reason for not engaging with G-Cloud, but both Microsoft and Salesforce, which receive as much legal advice as they do, have signed up to it. Perhaps the reason for their reluctance is that they have a business model with which they are comfortable and no plans to develop value propositions specific to the public sector. Another possible reason is that the contracts that are currently going through G-Cloud are not yet of a large enough scale to attract their attention. It has also been suggested that the biggest difficulty is the need to sign up to offering an unchanging product for two years. Companies such as AWS pride themselves on the continuous development of their products, with new functionality being added all the time. It will be interesting to see if the new “public cloud first” policy changes their position.
What is needed for G-Cloud iv?
“What should we be looking for in G-Cloud iv? Firstly, in addition to opening up the marketplace to SMEs, there need to be contracts going through that are of a large enough scale to tempt larger suppliers. Secondly, the government needs to maintain pressure on the demand side by extending their current policy of winning hearts and minds through effective communication and by removing alternative methods of procurement. Thirdly, the G-Cloud team must continue to reduce the barriers to entry, for example by allowing a painless rollover process for successive iterations.
“Now the start-up phase has passed, the government is sitting on a wealth of data about the market, which could be converted into information that provides the insight needed to identify gaps in provision. Sharing such insight would allow the G-Cloud team to target their marketing efforts to ensure that there is a match between what enterprises require and what vendors are offering on the framework. With the information that surfaces through the procurement process, the G-Cloud team could provide the bridge between what the public sector wants to buy and the products and services that the vendor community invests in developing.
“G-Cloud is not going to go away; it will increasingly become the procurement mechanism of choice. Ovum does not believe government support for G-Cloud’s CloudStore is a political decision, but rather one based on cost and efficiency, so it is likely to survive beyond the next election regardless of the outcome.”
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