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The opening of Amazon and Microsoft’s UK datacentres could have a dampening effect on the number of small and medium-sized enterprises (SMEs) securing business through the G-Cloud framework, it has been claimed.
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Speaking at the Think Cloud for Digital Government event in London, Jessica Figueras, chief analyst at public sector IT market watcher Kable, said SMEs using the Digital Marketplace to sell their wares were likely to face stiff competition from big-name IT firms in years to come.
“So far, the UK public sector cloud, particularly in the G-Cloud space, has been seen as an SME-rich ecosystem. [But now] the cloud giants are starting to build UK datacentres: Microsoft, Amazon Web Services and Oracle,” she said.
“This is going to be seriously game-changing. These giants will start to enter into the market, and we’re yet to see how much of their business they put through G-Cloud, but all this is going to seriously change the landscape,” she added.
To reinforce this point, Figueras said there was already evidence to suggest some public sector organisations were deliberately holding off a move to the cloud until the construction of UK datacentres by Amazon Web Services (AWS), Microsoft and others were complete.
“We know there are certain major buyers who are just waiting for those datacentres to come on stream. Some are actively planning so they will have everything ready to go the day those datacentres open,” she added.
Public sector IT oligopoly could rise again
As previously reported by Computer Weekly, AWS and Microsoft have outlined plans to build datacentres in the UK to address user concerns about storing their cloud data overseas.
Kate Craig-Wood, managing director of Surrey-based infrastructure-as-a-service (IaaS) provider Memset, said there was a risk that, should Figueras’ predictions come true, the age-old problem of public sector IT contracts being awarded to the same oligopoly of suppliers could rear its head again.
“What you have to consider is, what is the game plan of a company such as AWS? Is it that it wants to dominate the market, squeeze out the competition, so that in 10 years’ time it is in a position to charge what it wants?” she told Computer Weekly at the event.
Read more about G-Cloud
- Former Cabinet Office Crown representative says a simple rework of the G-Cloud tender could open up the procurement hub to public sector buyers across the EU.
- IT suppliers on the government’s G-Cloud framework have accused Whitehall procurement managers of unfairly favouring cloud collaboration firm Huddle, after striking a preferential pricing deal with the firm.
And, unless these providers have built their offerings on open source technologies and adhere to open standards, public sector IT organisations could fall foul of supplier lock-in later down the line.
“There is still plenty of room for little companies to have fun, innovate and be profitable – you just need to keep on your toes. But if you want G-Cloud to work, it needs to be a community, and it needs to work together – and that means open standards and open source,” she said.
Craig-Wood added that this was one of the reasons Memset had nailed its flag to the OpenStack mast.
In a similar vein, she said SME G-Cloud providers need to focus on providing additional services or expertise that will be difficult for more general IaaS suppliers to deliver. As such, Memset is positioning itself as a provider of “high-security” IaaS offerings, on the back of the successful deployment of its Public Services Network (PSN).
“I’m not overly worried in the near term, because we’ve been around government for around six years now. We know the ins and outs of the security standards, and we’ve been able to elevate ourselves to a security posture that is way above the requirements,” added Craig-Wood.
“While we’re still very committed to hosting and infrastructure as a service, we see security as our future direction. We’re already hosting apps for a few international banks, and it’s actually our work with government that has allowed us to make that step.”