Each year, the government spends £16bn on IT, and most of this is shared among just six large IT suppliers. That means there is a lack of competition in government IT, as well as a lack of innovation.
The G-Cloud, an online marketplace for cloud services, aims to change that by opening up government IT contracts to small and medium-sized enterprises (SMEs).
“We have built a marketplace that allows the public sector to buy and consume cloud services," said Mark Craddock, CloudStore lead for the G-Cloud programme.
So far, G-cloud has been responsible for £2.6m in government IT contracts for 100 public sector organisations.
Some 74% of the suppliers on G-Cloud are classed as SMEs. Craddock suggests they offer much better value than some of the large systems integrators traditionally used by the government.
“One government department went out to a systems integrator and was quoted £4m. When it went to G-Cloud, it was quoted £50,000,” he said.
The services on offer include data services, analytics, e-commerce, asset management and deployment, and email and content management system (CMS) solutions.
Read more about the G-Cloud framework
Simplifying IT contracts
By using the G-Cloud, public sector organisations can take some of the due dilligence work out of IT contracts.
G-Cloud is essentially a framework contract, which means government departments that make use of it have no need to advertise the contract in the Office Journal of the European Commission (OJEC).
“There is no need to do a tender or any mini competition. You can search the CloudStore based on your requirements, and at that point you can sort by the cheapest and just by the cheapest,” said Craddock.
Other search options allow customers to search for the most economically advantageous tender (Meat), for the specifications they need.
“You can specify whether you want a UK datacentre, or special integration facilities, and then buy the service you want, there and then,” he said.
In one case a government organisation was able to procure a cloud service from scratch in 24 hours – the quickest so far, said Craddock.
The growth of G-Cloud
G-Cloud 1 – closed April 2012
- 240 suppliers
- 1,700 cloud services
G-Cloud 2 – closed October 2012
- 458 suppliers
- 3,280 cloud services
G-Cloud 3 – due April 2013
- Tenders go out to suppliers in December
Source: Mark Craddock
Transparency and quality assurance
Suppliers have to agree to some standard conditions that override their own terms and conditions – providing an additional layer or protection to public sector customers.
They have to be transparent about the cost of their service, exit charges and where they store their data, Craddock told the meeting.
They also have to explain how customers can retrieve their data at the end of a contract, and what format it is returned.
And each supplier also goes through a government quality assurance programme, said Craddock.
“They are not allowed to change their terms and conditions during the life of the framework, and they are not allowed to materially change their service description,” he said.
In some cases, CESG, an arm of GCHQ, will review the end-to-end cloud service. That includes where the data is held, who has access to it, and in cases where suppliers have “follow the sun” support centres, whether data can be accessed overseas.
“That is all looked at on a yearly basis so they can assess the risk of that organisation and make that available so the buyer makes an informed decision whether to go with that service provider or not,” said Craddock.
The service has perhaps placed the public sector in a stronger position for moving to the cloud than the private sector.
However, as G-Cloud is an open system, private sector companies can use it to compare the prices they are being quoted with the prices offered on G-Cloud.
This level of openness has not put suppliers off wanting to join G-Cloud, however, said Craddock. “We have 458 suppliers, and there is a queue of people waiting to join G-Cloud 3 when it comes out at the end of December,” he said.
More from the CW500 Club
G-Cloud: are one-year contracts too short?
G-Cloud aims to bring an end to expensive, multi-year government IT contracts.
Under the G-Cloud framework agreement, government organisations can sign contracts for a year or two years in exceptional circumstances.
But this may not be long enough for public sector organisations to justify major IT investments, senior IT professionals at Computer Weekly's 500 club heard.
Nick Roberts, IMT group manager of Surrey County Council, said it would take the council 18 months to migrate its email to a cloud solution.
"To do that for such a short-term contract is not worth the effort," he said.
But Mark Craddock, CloudStore lead for the G-Cloud programme, said the rules were unlikely to change.
The long-term contracts of the past, which lasted four or five years, never generated the best value for government, he said.
"By signing up to a contract of one or two years we are truly in a competitive scenario," said Craddock.
However, he told the meeting there was nothing stopping organisations going back to the CloudStore and buying the same service again after a year.
Organisations can factor in the cost of migration to another supplier when they carry out a price comparison.
"The cost of migration could be quite significant, so it could be cheaper to stay with the same supplier," he said.