Recruiters have so far earned £104m collectively through the G-Cloud framework, according to a report, with the IT skills gap and the high rates commanded by specialist cloud workers cited as reasons why.
The report, from New View Market Services, claims since the framework kicked off in 2012, a total of 49 recruiters have collectively made £104m, specifically through the fourth Lot, Specialist Cloud Services. This, the report claims, represents seven per cent of the total G-Cloud revenue.
While the first three G-Cloud Lots - IaaS, PaaS and SaaS, respectively - are designed for the procurement of the cloud services themselves, Lot 4 offers a range of specialist services designed to "help with the transition and management of cloud services under different cloud models," Digital Marketplace documents state.
But they further state that IT consultancy requirements greater than £100,000 should be sourced using ConsultancyOne and that where individual people or teams are required to design, build or deliver services, the Digital Services framework - now Digital Outcomes and Specialists (DOS) - should be used instead.
In recent months, the government has vowed to tighten up the scope of G-Cloud's Lots after admitting it has often been used to source people, rather than cloud services. It hopes the arrival of DOS will partially solve this issue.
Mark Elkins, New View Markets' director, said in the last year alone, £60m has gone to recruiters through the framework.
"There's a skills deficit in the government and they do need the developers, and so on, to be able to execute a cloud-first policy," he told CRN. "Yes, there's a skills gap. And, yes, they are needed. Is it the appropriate place? I think the GDS has recognised that a lot of digital contractors are being put through G-Cloud and they've turned around and said this is not allowed for G-Cloud 8."
Rob Anderson, principal analyst at Kable, agreed that things should change with G-Cloud 8.
"Frankly, it is not a surprise to me and I don't think it would be to GDS either," he said. "That Lot has been badly abused and used for body-shopping. So, with the tightening up of the parameters of it for G-Cloud 8, they're hoping to shift that to the DOS framework. Although £104m does sound a lot over the lifetime, at £800 a day for a specialist it doesn't take much to rack up that sort of money."
Mind the skills gap
The New View Markets report claims that LA International has benefitted most through the framework, having been awarded £13.5m of work, narrowly pipping Alpine Resourcing to the top spot. Parity Group, Russam GMS and Allen Lane completed the top-five most successful recruiters on G-Cloud by recorded revenue, according to the report.
Part of the reason these firms, and the other 44 recruiters winning business through the framework, are doing well, is because of the industry-wide technology skills gap, Elkins suggested. He said that often, public sector bodies are just not able to bring in their own skilled staff, so have to bring in temps.
"It would certainly be cheaper [to recruit their own full-time staff], but a lot of civil service and government organisations have sought to close the skills gap with the training of their staff and ensuring they're working alongside contractors," said Elkins.
"There are attempts to do it but they haven't been totally successful.
"Some of it maybe be that staff aren't prepared to take on the technical challenge and some of it might be that it is easier and more convenient to get expertise in.
"It is a challenge they are wrestling with and hoping to address."
This, he added, could spell an opportunity for resellers who can offer their own skilled staff to help, but he added that this could blur the line between providing IT and consultancy work, which some channel firms are unwilling to do.
Kable's Anderson said relying on external skills can be an expensive business.
"It would be cheaper for them [to get the skills in-house] and there are some departments which would dearly love to do so," he said. "There are a number of problems behind it - can they afford to pay market rates? Digital developers are in high demand. And also, with continued austerity, it's often easier to put it through a framework instead of getting new headcount. Particularly for short-term development because then you don't have to go through the rigmarole of getting someone on board."
Deloitte has been appointed as administrators for the struggling distie
It's been announced that billionaire tech pioneer Paul Allen died on Monday from non-Hodgkin lymphoma
Your latest edition of CRN
Air-IT founder Todd McQuilkin imparts the first 10 of his golden nuggets for MSP owners