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Sloppy SaaS firms lose out on G-Cloud deals, research suggests

Ex-EuroCloud general secretary Lindsay Smith claims SaaS providers need to stop blaming others for their lack of G-Cloud sales success

The majority of G-Cloud-listed software-as-a-service (SaaS) providers are failing to win deals through the Digital Marketplace because their listings are not up to scratch.

That’s according to former EuroCloud secretary general Lindsay Smith, whose research into Digital Marketplace buying trends suggests three-quarters (77%) of SaaS suppliers recorded zero sales during the 12 months to January 2016.

Of the SaaS providers that are winning business via G-Cloud, just 8% earned more than £100,000 in business over the same time period, with total sales of £42m.

Speaking to Computer Weekly, Smith said G-Cloud suppliers are often quick to blame others for their inability to win business through the framework, when the problem often lies with them.

“People will often say they can’t sell on G-Cloud because there is dodgy stuff going on with local authorities, because the councils are all in somebody’s pocket or they always go back to the suppliers they are comfortable with using, but it is hogwash,” said Smith.

“Public sector IT buyers are all so careful nowadays with having open and transparent procurement procedures they follow rigorously. It is the providers that are misguiding themselves.”

To back this point, Smith picked 30 Digital Marketplace profiles at random from the list of the 609 SaaS providers with zero sales for further assessment, and claims more than half the listings lacked sufficient detail for public sector IT buyers to shortlist them.

While cloud security remains an enduring concern for IT buyers, Smith said a number of the unsuccessful SaaS providers lack must-have credentials such as ISO 27001.

Read more about G-Cloud

“If you want to be successful in G-Cloud, you have to be complaint – there are at least 400 companies that are not, and the lack of compliance is so catastrophic they will not be able to make a sale ever,” he said.

Another example of bad practice Smith came across during his research involved a SaaS provider whose published price list is based on users taking out a 36-month minimum contract with the company. Under G-Cloud procurement rules, contract are supposed to end after 24 months.

“If you’re an IT buyer, you’ve wasted your time reading that because the document tells them to pick up the phone to get details of their other pricing plan, except they’re not allowed to because it is classed as negotiating on price,” he said.

Search engine optimisation (SEO) also needs to be more closely considered by suppliers when listing their wares in the Digital Marketplace, said Smith, as few seem to realise that only the terms included in the top 150 words of their entries are picked up.

A deeper dive into the data

Further details of Smith’s research are featured in his G-Cloud Success, Analysed report, which has been five months in the making. The report focuses exclusively on what SaaS providers can do to generate more business from the public sector framework.

Smith’s findings are based on an analysis of the structured and unstructured data used to create a provider’s listing on G-Cloud. This information is then mapped to the Digital Marketplace data GDS publishes each month.

“This allowed me to create a big data engine with every sale on it that’s associated with every supplier on the marketplace, and then I started looking for correlations between the datasets,” he said.

“What we found is that everybody is slinging mud and pointing the finger at somebody else as to why they’re not selling more, when really they should be looking in the mirror.”

Supplier feedback

Speaking to Computer Weekly, John Glover, sales and marketing director at G-Cloud listed online collaboration firm Kahootz, backed Smith’s research. He said there is plenty suppliers can do to help themselves on the Digital Marketplace.

As an example, he claims to have come across listings featuring hyperlinks that point to defunct websites or 404 error pages, which hardly instils confidence in the quality of their cloud offerings.

Because of how open and accessible the Digital Marketplace is, suppliers may withhold information about what their services do and how much they cost because they do not want their competitors to know.

“People still protect a lot of their intellectual property from their competitors in The Digital Marketplace and, inadvertently, hide it from their prospects as well, but the only way to succeed is be as fully transparent as possible,” he said.

Kahootz offers free trials of its service, which allows its competitors to kick the tyres of its product and see what users get for their money, Glover added.

“We are giving information away to competitors and we’re very exposed doing that. I’m happy to risk it, though, because if we didn’t offer a free trial, we wouldn’t have been shortlisted for the deal we won with the Ministry of Defence, or picked up other prospects.”

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