Skyscape slashes prices to offset government cuts

Cloud company claims to be doing right by the taxpayer

Public sector cloud provider Skyscape has cut its prices, in some cases by as much as 90 per cent, in order to "do what's right for the taxpayer" after the government announced its latest round of cuts yesterday.

Chancellor George Osborne announced a number of departmental budget cuts during his Spending Review and Autumn Statement yesterday - for example, the Cabinet Office's budget will shrink by 26 per cent and that of the Department of Health will shrink by a quarter.

Skyscape said that in order to help the public sector out, it will slash its prices - the eighth price cut it has made in three years.

Skyscape's Compute-as-a-Service prices will fall by as much as 50 per cent, while the cost of its Hadoop-in-the-Cloud service will be cut by a massive 90 per cent when bought through G-Cloud 7. The firm is also preparing to absorb recent increases to Microsoft SPLA pricing, meaning customers won't be affected by the 26 per cent hike.

Skyscape chief executive Simon Hansford told CRN that the discount bonanza is part of the company's wider mission.

"The ethos of our company is doing what's right for the taxpayer," he said. "We think it is a very different approach to other suppliers which work in government. One of the things about doing what's right is that as we scale, we get cost savings and we want to pass those on.

"When we saw the cost savings that are still required by government which were outlined yesterday, we thought it was a great opportunity to remind government that as a supplier, we are doing the right thing."

The company operates a pay-by-the-hour usage model, allowing customers to avoid paying for services when they don't need them, such as evenings and weekends.

Hansford said his company is able to make such big cuts to its prices because of its unusual supply model.

"We have a ‘just in time' supply chain so we buy things and deploy them at today's pricing," he said. "Typically in IT, people buy things for between three to five years so they have [things] sitting on the floor that is at prices bought five years ago.

"Our price points are continually dropping, our utilisation rate is extremely high - we only buy what is being used - and we are a very efficient company. Because we buy just in time, everything has to be fully automated. That drives down price and drives up quality."