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Memset laments ‘pitiful return’ on G-Cloud datacentre investments

Memset managing director Kate Craig-Wood claims public sector buyers are too entrenched in old procurement practices to make the most of G-Cloud

G-Cloud champion Memset is threatening to withdraw from the cloud procurement framework, blaming the “pitiful returns” the company has seen from its long-standing involvement in the initiative.

The infrastructure-as-a-service (IaaS) provider’s managing director, Kate Craig-Wood, said she is undecided about entering the eighth iteration of the framework, having secured no new business through the Digital Marketplace (previously CloudStore) since 2013.

“We are seeing an utterly pitiful return via G-Cloud – about £100,000 a year,” revealed Craig-Wood in a blog post, which reportedly represents around 1.67% of the firm's annual turnover.

“We do have a fair bit of other government business now, but not via G-Cloud, and nowhere near enough to make it a profitable venture.

“With the eighth iteration of the framework due, we’re actually asking ourselves whether it is worth it at all,” she wrote.

Moving goalposts

In a follow-up call with Computer Weekly, Craig-Wood said Memset had invested millions of pounds in its datacentre and network infrastructure to meet public data security standards and, ultimately, win business through G-Cloud.

As a result of these abortive investments, Craig-Wood claimed Memset’s growth had markedly slowed, resulting in less innovation and fewer jobs being created at the firm.

“We were told ‘PSN is the future – it’s the network of networks’. But hardly anyone is using it’
Kate Craig-Wood, Memset

For example, the company invested £2m in building a datacentre in Cranleigh, Surrey, only to see the facility’s go-live date beset by delays when trying to deploy a Public Services Network (PSN) connection at the site.

Having worked through those problems, Craig-Wood said that, despite assurances to the contrary, few public sector organisations were using the PSN to transfer their highly secure data.

“Most people aren’t connected to it, to our great surprise, because we were told ‘PSN is the future – it’s the network of networks’. But hardly anyone is using it,” she said.  

“What we’re seeing is a load of government organisations – when it comes to making their next iteration of their own network – side-stepping PSN.”

Empty promises

Craig-Wood also went on to share examples of features of the Digital Marketplace she claimed GDS had previously promised to improve on or to introduce that have failed to materialise.

“The ability to do side-by-side comparisons of comparable services in the Digital Marketplace has been on the wishlist for six years. It was in the initial designs, and it’s integral to actually making the marketplace function properly,” she said.

“In the buyer’s guide there was a requirement to give feedback to suppliers that were shortlisted but didn’t win business. [GDS] never actually did that, but it’s really important for us as a supplier to find out why we’ve lost out.”

Bad search engine

Around the same time as GDS dumped the CloudStore branding and adopted the Digital Marketplace as the shopfront for G-Cloud, changes were also made to the way public sector buyers could find and search for services.

This saw greater emphasis placed on the use of search engine optimisation (SEO) principles in the marketplace, prompting suppliers to populate their service listings with commonly searched for keywords.

Rather than make it easier for users to find services that met their requirements, Craig-Wood said the changes paved the way for suppliers to spam the marketplace with keyword-dense entries to ensure their listings come out on top. 

“The Digital Marketplace is like one of the bad search engines of 1998 – it’s very susceptible to gaming it with SEO-heavy keywords and the like,” she said.

Old buying habits die hard

More also needs to be done to educate the buying community about how to use the Digital Marketplace, with Craig-Wood claiming too many deals were still being conducted on a “who you know” rather than a “what you sell” basis.

“You can’t blame G-Cloud or the Digital Marketplace for that, because that’s down to buyers failing to change their behaviour,” she said. 

“We are getting some new government business. It’s not G-Cloud opening the door for us, though. Instead, we are going through partners and other routes.”

Cumbersome and restrictive

G-Cloud-listed field service management software supplier OneServe, which has clinched deals with local councils and social housing organisations via the framework, also expressed misgivings about how the framework operates and who it is aimed at.

Speaking to Computer Weekly, the firm’s CEO, Chris Proctor, said: “While the point of G-Cloud is to cut down on bureaucracy and make the procurement process faster, universal and much easier for organisations on both sides of the fence, a lot of clients go and do it outside of G-Cloud.

“People are aware of G-Cloud, but they find it too cumbersome, too restrictive or it doesn’t meet all their requirements”
Chris Proctor, OneServe

“Islington Borough Council, as an example, didn’t want to use G-Cloud, and went through its own tender process. We find that to be the case quite a lot.”

Echoing Craig-Wood’s view, Proctor said an element of “better the devil you know” persists with public sector IT buyers, particularly in local authorities, which sees many of them opt out of using G-Cloud altogether.

“There are quite a few conversations we’ve had with people about G-Cloud where they’ve told us they are aware of it, but they find it too cumbersome, too restrictive or it doesn’t meet all their requirements,” he said.

Evolve or die? 

The G-Cloud was launched over four years ago now, and has undergone some major changes since its debut. A number of senior figures tasked with overseeing the venture have come and gone during this time.

In light of these changes, and the experiences of Craig-Wood and others, John Glover, sales and marketing director at Kahootz, said GDS should consider holding a review into the current state of the framework and to shape its future direction.

“An honest review – with buyers and suppliers – that is totally transparent would be good. I’m a big supporter of the G-Cloud, and it’s been great for our business, but I would just like to get my business to the next stage, so I need to know where it’s going. In the early days, I had that feel,” he said.

Computer Weekly contacted the Cabinet Office for comment on this story, and was told that, as preparations are underway for G-Cloud 8, it was unable to comment at this time.

From a review perspective, the Digital Marketplace published plans in April 2016 to use the lead-up to G-Cloud 9 to sound out suppliers and public sector buyers about where to take the framework next.  

“For me, G-Cloud was more than just about putting a cloud appstore online – it was transformational agenda. And it seems like that last bit hasn’t been followed through,” Glover added.

“But it is something innovative the government is trying to do with G-Cloud, and the thing with innovation is you don’t always get it right first time.” 

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Kate's right. G-Cloud was only ever going to work if it was pushed on to public sector IT buyers, and since John Suffolk stood down they have gone back to their cozy relationships with the big boys who make signing the contracts easy and gratifying.
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