SMBs claim HP government IT tantrum proves them right

HP alleged to have expressed concerns over government's £100m contract cap

G-Cloud supplier Databarracks has said recent reports of an HP tantrum over government IT supply proves that smaller suppliers are slowly beginning to win the war against massive providers.

Last week, The Independent claimed that HP had written to the government expressing its concerns over the Cabinet Office's well-publicised plans to break large supplier oligopoly in favour of working with smaller, more agile providers.

Last year, as part of its pro-SMB campaign, the government introduced a range of "radical" new measures such as capping IT contracts at £100m in a bid to level the playing field for smaller firms, which it claims can save taxpayers money.

The Independent claimed HP – which is the government's largest IT supplier – questioned whether it was even worthwhile competing for future contracts if the government is no longer interested in doing business with multinationals.

Though in an official statement HP insisted it was happy with the government's approach and reiterated its commitment to SMBs.

"HP is a proud and long-standing supplier of IT products and services to [the] government and provides vital public services to UK citizens," it said in a statement. "We maintain an open and ongoing dialogue with government about our programme of work."

It added that through its SMEngage programme, HP subcontracts about 25 per cent of its UK public sector work to firms of varying sizes including 700 SMBs.

But SMB supplier Databarracks – which along with other smaller providers has been vocal about the government's supplier shake-up – said the alleged HP letter proves smaller firms are winning.

"Claims that SMEs are not well equipped enough to cope with public sector IT requirements are ridiculous, and the reaction from firms such as HP are testament to this," said Peter Groucutt, managing director of Databarracks.

"For years, the SIs that have controlled the market have made it purposely difficult for smaller providers to break the oligopoly that they created. G-Cloud providers have persevered, however, and we're finally starting to make headway as real competitors – much to the annoyance of the SIs.

"We're facilitating a move away from long-term, expensive contracts by giving government departments the opportunity to implement a whole set of new, flexible solutions that were previously not an option."