Government IT Oligopoly to end. Cabinet Office will not renew most big outsourcing deals in 2015

The Cabinet Office said it will not renew most of the large IT outsourcing deals coming up to the end of their terms in 2015.

In its latest report on spending with SMEs the Cabinet Office also said, instead the government will break these deals up and appoint more SMEs as suppliers.

“Central government spends £7bn a year on IT, with the majority of the largest contracts that make up this spend coming to an end in 2014-15. We have made sure that the barriers to entry that government put in the way of small businesses have been lifted,” said a Cabinet Office report.

“Competition in procurements will be encouraged, with no like-for-like extensions to existing contracts. Programmes will be disaggregated for commercial purposes – broken down into components supported by the market to enable many suppliers to bid. This will open the door to new vendors to bid for government business.”

This could really shake up the IT services sector in the UK. I wonder if this will be a major door opener for the offshore IT service providers, in particular the Indian players.