Government won't 'pay less for wrong solution' for cloud's sake
Cabinet Office eyes 'reducing dependency on SIs', but not at the expense of commercial sense
The Cabinet Office has stressed that it wishes to reduce its reliance on hulking systems integrators (SIs) and it will not "pay less for something that is not right"regardless of whether it is supplier by a big SI or a niche cloud provider.
Denise McDonagh, director of the G-Cloud programme, was widely quoted a week ago claiming that many incumbent government suppliers have begun dropping their prices to compete with cloud providers.
"That makes me furious for two reasons," she said. "One, [the government] should be moving to a different way of buying and reducing your dependency on the big SIs. But it makes me more furious that an SI can either deliver that service a lot cheaper than they previously said or they are taking a loss."
In a statement made to CRN, a Cabinet Office representative reiterated the desire to rely less on big SIs, but claimed that the ultimate goal is to create a truly competitive market.
"Reducing dependency on SIs is about increasing competition – it is not about paying less for something that is not right from an SI, even if it's cheaper," said the representative. "We will buy IT in a more commoditised way based on open standards, and – as shown by G-Cloud – there are many suppliers able to meet this requirement. If SIs provide the right products, then they will be part of the competitive marketplace."
Behave yourself
McDonagh claimed that incumbent suppliers suddenly offering cut-price deals must be urged to "behave better". When asked if and how it would go about encouraging this, the Cabinet Office explained that, among other things, it will take a close look at how suppliers have performed on other government projects.
"We are continuing to introduce unprecedented and comprehensive reforms across all areas of procurement and supplier performance management," said the representative. "As part of this, we intend to take past performance into account before new contracts are given. This is simply good, and well-established, business practice."
The representative also stressed the important role played by the government's Crown representatives, a 10-strong team of business figures brought in to help lower central government spending with suppliers. According to the Cabinet Office, the representatives negotiated savings of £800m during the coalition's first 10 months in power on "excessive and expensive government contacts with suppliers". Each individual representative is expected to "deliver savings worth around £50m a year".
"Crown representatives bring specialist commercial insight to make sure government acts as a single customer and uses its buying power to maximise value in every contract," added the Cabinet Office representative.
Cloud first
If incumbent IT providers are able to deliver solutions at or below the cost of those offered by G-Cloud suppliers, CRN asked the Cabinet Office why it was important to move towards cloud firms at all. The representative explained that the G-Cloud framework offers a competitive market – in terms of price and quality – as well as ease of use for the government.
"G-Cloud provides a competitive marketplace with a range of service providers constantly improving the quality and value of the solutions they offer, from small SME organisations providing niche products to large-scale hosting and computer server capacity," said the representative.
"The G-Cloud also enables government to change service providers easily, without lengthy implementation cycles or lock-ins to long contracts, and with the freedom to quickly adopt better value and more current solutions."
Despite the hype and the volume of suppliers on the G-Cloud framework, volumes of business through it have been muted so far, with a reported total of just £7.4m spent so far. McDonagh claimed a week ago that the government will enact a "cloud-first policy", with departments urged to use public cloud services wherever possible. The Cabinet Office stopped short of saying departments will be mandated to buy cloud, but claimed it is examining ways to fuel adoption.
"A Cabinet Office paper setting out the progress that has been made in adoption of cloud computing in the public sector, and proposing steps to accelerate the benefits by strengthening existing policy, is to be considered shortly by the Cabinet Public Expenditure: Sub-Committee on Efficiency and Reform," revealed the representative.