UPDATED: G-Cloud iii reaps 'bumper crop' of new suppliers

But large suppliers should be encouraged as well in future, warns Ovum

G-Cloud has meant a 50 per cent rise in successful supplier applications for government business, according to researcher Ovum – but it warns the government not to forget the role of larger providers in its rush to sign up SMBs.

Joe Dignan, chief public sector analyst at Ovum, said its Cabinet Office sources say there is a "bumper crop" of suppliers coming through on the not-yet-live G-iii phase of the G-Cloud programme, and that a 50 per cent rise in successful applications is expected as a result.

"This means there is a concomitant increase in the diversity of solutions and services on offer, but it is critical that the G-Cloud team ensures that the increase in the number of offerings does not mean a reduction in standards," he said.

He added that the G-Cloud team attributes the rise in applications to increased G-Cloud traction in the marketplace, a better demand-side understanding of the benefits, improved marketing and communications, an easier application process, and the support of senior ministers.

"This support has resulted in the closure of a number of frameworks, such as Service Integration and Management (SIAM), to force procurement to be directed toward G-Cloud," Dignan said.

"What should we be looking for in G-Cloud iv? Firstly, in addition to opening up the marketplace to SMBs, there need to be contracts going through that are of a large enough scale to tempt larger suppliers."

He said he believes that "a number" of large SIs, including TCS, have now taken a G-iii spot. However, one of the largest players, Google, has not come on board – and arguing that the US Patriot Act is one reason.

"But both Microsoft and Salesforce, which receive as much legal advice as they do, have signed up to it," noted Dignan.

"Perhaps the reason for the reluctance is a business model with which they are comfortable and no plans to develop value propositions specific to the public sector. Another possible reason is that the contracts that are currently going through G-Cloud are not yet large enough to attract attention. It has also been suggested that the biggest difficulty is the need to offer an unchanging product for two years."

As this story was published, another large cloud player, Amazon Web Services (AWS), announced its first reseller to the UK government - Cambridge-based Arcus Global.

Dignan said that in G-iv the government will also need to maintain pressure on the demand side through effective communication and by removing alternative methods of procurement.

The G-Cloud team must also keep lowering the barriers to entry, by for example harnessing a painless rollover process for successive iterations, Dignan added.

"The good news is that we appear to have reached the end of the beginning for G-Cloud, with the Cabinet Office reporting sales of £18.2m going through the first two procurement frameworks, G-i and G-ii. The delay in getting G-iii up and running is apparently due to there being 50 per cent more suppliers and a much greater diversity of offerings. The increase in volume has caused the small G-Cloud team issues in sending out award letters," Dignan said.

"The G-Cloud team should be applauded."

So far, there are 462 suppliers, and 75 per cent are SMBs offering 3,185 services via four lots – although most contracts have been for consultancy, especially Agile and cloud enablement projects.

Dignan's conclusions are based on several recent Ovum reports including Cloud Services First: a Next-generation Shared Services Policy for Government, published in April.