Meet the resellers making hay from G-Cloud
Some 22 resellers in CRN's Top 250 VARs have generated £1m business through G-Cloud. Here we catch up with four of them to find out how they've succeeded in cracking the cloudy framework where many suppliers have failed
G-Cloud launched in 2012 with the aim of shaking up the public sector procurement landscape.
Six years on, and on the eve of the launch of the tenth iteration of the framework, G-Cloud has stimulated close to £3bn of sales for suppliers.
Although making the cut is no guarantee of revenue - in 2014 two thirds of suppliers on it were yet to earn a penny - G-Cloud is becoming big business for many, including a clutch of the UK's top resellers who have used the framework to boost their sales of cloud services into central and local government.
In fact, 22 resellers that rank in CRN's Top 250 VARs have conducted over £1m of business through G-Cloud, with 10 generating more than £5m from it.
Subscribers to CRN Essential can view a full breakdown of the 22 here, but in this article we catch up with four of them to get their tips on how traditional ICT suppliers can make a success of G-Cloud.
We also asked them about whether they feel G-Cloud has achieved its original aim of shaking up the status quo and opening up central government IT spending to SMEs, what their G-Cloud bugbears are, what lessons they've learned, and whether a recent shift in G-Cloud spending towards consulting giants (Capgemini and Deloitte are now second and third in overall G-Cloud business on £83m and £82m, respectively) is a cause for concern.
The four £1m-plus G-Cloud VARs we spoke to are featured here in ascending order, beginning with 19th-ranked Risual.
19. Risual
Total G-Cloud sales: £2m
Number of G-Cloud deals: 116
Overall G-Cloud ranking: 240
Largest deal to date: £248,125 (Competitive Markets Authorities: G-Cloud 8)
Representative: Alun Rogers, co-founder
What has been your recipe for success?
The secret to success is understanding what G-Cloud is and that a traditional sales approach won't work.
Traditionally in sales you go and talk to a customer about what you think they want to buy. The big pivot with G-Cloud is it gives you a good view of what government customers actually want to buy. Once you've understood that change, it's about making yourself really organised to deal with it. We now have a dedicated team that focuses just on writing bids.
"We're now a top 250 supplier to UK government. That could never have happened in a pre-G-Cloud world," Alun Rogers, Risual
We've moved from a model where sales staff are running around meeting customers to one where you are writing bids, and if you make that mental switch it's actually cheaper to sell through G-Cloud than the traditional route.
Has G-Cloud achieved its original aims?
If you understand G-Cloud and that you have to change your sales approach, it's fantastic, so it has achieved its original aim for the people who get it. For the people who don't, it hasn't worked, but that's their fault, not G-Cloud's. For me it's great as my cost of sale is going down and my customer acquisition and deal size is going up.
G-Cloud is an easy framework to get on if you fill in enough paperwork. It's a new game SMEs can play that they couldn't play before. Before we'd have to subcontract through an SI and they would top-slice our margins. We're now a top 250 supplier to UK government - and that's around services, not product - isn't that really cool? That could never have happened in a pre-G-Cloud world.
What is your top tip for budding G-Cloud suppliers?
That having normal salespeople responding to G-Cloud doesn't work. Those guys live in a world where they meet a customer, build the relationship, and write a proposal. That's not how G-Cloud works. You are selling to an invisible person, therefore the way you write the bid is completely different.
How concerned are you that more G-Cloud spending is shifting towards the big consultancies such as Capgemini and Deloitte?
People like Methods are doing really well. They sit somewhere between a body shopping business and a consultancy, and they've grown hugely through it. You've got smaller players dominating central government, and that wouldn't have happened before.
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Meet the resellers making hay from G-Cloud
Some 22 resellers in CRN's Top 250 VARs have generated £1m business through G-Cloud. Here we catch up with four of them to find out how they've succeeded in cracking the cloudy framework where many suppliers have failed
13. Daisy
G-Cloud sales: £3.6m
Overall G-Cloud ranking: 164th
Number of deals: 93
Biggest deal: £369,917 (Sussex Partnership NHS Foundation Trust: G-Cloud 3)
Representative: Andy Riley, public sector network director
What's been your recipe for success?
Making sure our offerings are broad enough to appeal to as many customers as possible. At Daisy we have over 5,500 public sector customers that could technically buy through G-Cloud, so we have to make sure our offerings on there have the breadth to appeal to as many of them as possible.
"G-Cloud has really put cloud services on the map," Andy Riley, Daisy
And also using industry-specific keywords that mean you can be found easily. It's not rocket science but it has taken a while to get those words in place that will get the searches to generate the business you require.
Has G-Cloud achieved its original aims?
I think it has. It had a slow start, which was well documented. There were a lot of people using G-Cloud as a procurement vehicle for services which weren't deemed cloud services and that was quite well documented. But for the last few iterations of G-Cloud they've tightened up the services you can get on there. G-Cloud has encouraged people to start looking at cloud services. It's really put cloud services on the map. When I sit in front of customers and talk about G-Cloud, they may not know what it is, but they know it's a vehicle for cloud services, so I think it has achieved its aim.
What's your top tip for budding G-Cloud suppliers?
Using keywords that are relevant to the customers you are targeting, with the language they use.
What is your biggest G-Cloud bugbear?
That it is not very dynamic. I believe they are moving towards a dynamic purchasing system but at the moment the framework dictates that you've got to put your offerings on there and they could stay on there for a year. It needs to be agile, fresh and always moving. I'm changing my products on a monthly basis to appeal to my customers.
How could G-Cloud be improved?
It's exactly that. We can't stagnate for six months at a time on a framework with set products. The success of RM1045 [Network Services] is because we are allowed to upload service offerings at the drop of a hat. If you can go into a customer who says ‘I want everything in yellow', we can upload that and they can have everything in yellow. That's how dynamic it needs to be.
How concerned are you that more G-Cloud spending is shifting towards the big consultancies such as Capgemini and Deloitte?
It's not a worry for me. There are government mandates out there stating that public sector bodies are supposed to be giving the smaller guys a fair chance to win the business. I would expect to see a shift away from that over the next few iterations of G-Cloud and that you'll see the smaller guys coming up and winning some decent business.
Meet the resellers making hay from G-Cloud
Some 22 resellers in CRN's Top 250 VARs have generated £1m business through G-Cloud. Here we catch up with four of them to find out how they've succeeded in cracking the cloudy framework where many suppliers have failed
4. MCSA
G-Cloud sales: £12m (including CSA)
Overall G-Cloud ranking: 51st (including CSA)
Number of deals: 23
Biggest deal: £4.2m (Nottingham University Hospital: G-Cloud 5)
Representative: Paul Timms, managing director (pictured)
What's been your recipe for success?
Having a very narrow focus. There are over 2,000 suppliers on G-Cloud and if you multiply that by the number of products on there, it's quite a big beast. So we've really just focused on some key partners around the NHS space - so things like patient record data and single sign on. We just work with the customers in the NHS that want to buy those solutions, and enabling them through G-Cloud.
Has G-Cloud achieved its original aims?
For me that's quite difficult to say as I just see a very small part of what G-Cloud achieves. But it has certainly focused us and others in the channel on the cloud and looking at different ways of delivering outcomes for customers through SaaS, PaaS and IaaS. It has certainly created innovation.
What is your top tip for budding G-Cloud suppliers?
Focus on something that is different and would help a particular area of public sector. If you put Office 365 into G-Cloud you'll get nearly 1,000 entries. Someone from a public sector body trying to search for an Office 365 partner is not going to trawl through 1,000 partners. Through your description you can be very specific and capture requirements quite succinctly.
What's the biggest lesson you have learned on your G-Cloud journey?
The issue with G-Cloud is you can't do any live updates to do it. So when you set off at the beginning of, say G-Cloud 9, you set out your product set and then you can't change it for the number of years it's live. As we all know cloud technology is changing monthly if not more quickly. So it's about trying to input things in there that are going to last for the duration and having that laser sharp-focus on what you think you can achieve for specific verticals.
What is your biggest G-Cloud bugbear?
The lack of live updates. Because you can't change prices or descriptions, or add new products, it can become obsolete quite quickly.
How can G-Cloud be improved?
They do pretty well at listening and they do want to learn. But maybe they could run a session one month on IaaS for the NHS and invite along anyone with those sorts of products to talk to people from the NHS about that. The next month it could be people from universities to talk about SaaS for student record data. That education piece would help public sector buyers understand what all these terms emanating around cloud are.
How concerned are you that more G-Cloud spending is shifting towards the big consultancies like Capgemini and Deloitte?
Maybe a little. But if you're talking about some of these very big projects in the NHS, HMRC or national government, they are enormous. Trying to do an enormous Office 365 roll out for central government is not something an SME can take on as it's too big a risk. That's why you have Sis like Capgemini and Atos there - they will sign up to the risk and penalties, and will then sub-contract out a lot of stuff to SMEs. SMEs like us can work on things up to £1m but if HMRC wants to go with someone with massive clout who they can beat with a stick if they fail - we wouldn't be able to sign up on those terms.
Meet the resellers making hay from G-Cloud
Some 22 resellers in CRN's Top 250 VARs have generated £1m business through G-Cloud. Here we catch up with four of them to find out how they've succeeded in cracking the cloudy framework where many suppliers have failed
3. Fordway
Total G-Cloud sales: £13.1m
Number of G-Cloud deals: 159
Overall G-Cloud ranking: 43rd
Largest deal to date: £332,018 (Central government: G-Cloud 3)
Representative: Richard Blanford, managing director
What's been your recipe for success?
We were a reasonably well-known public sector supplier before G-Cloud came out, and had all the relevant badges and an understanding of the market. Secondly, we got on G-Cloud early: our first major win came on G-Cloud 2 in 2012/13. So it's been good steady progress since then, and once you've got one win you start winning more. Quite a lot of our G-Cloud business is suggesting to customers that they may look at G-Cloud if it's not one they're buying through - we use it as a marketing tool.
Has G-Cloud achieved its original aims?
Before G-Cloud our public sector customers were generally local authorities and the NHS, and G-Cloud has opened up central government to SMEs like us. The other thing G-Cloud has done - and we have seen it recently with frameworks like Technology Services 2 - is Crown Commercial Services are now approaching frameworks in a slightly different way. Historically they chose the top six or eight companies and everyone else was excluded. Now there is a bar set for quality and if you pass over that bar you're on the framework, so it has definitely helped SME engagement within central government. We are living proof of that as at least two-thirds of our G-Cloud sales (£13.1m) have been with central government.
What is your top tip for budding suppliers?
There are three I would suggest.
"We've got 12 services that I don't think we've transacted anything with. Just because you're on the framework, that doesn't mean you're going to get any business at all," Richard Blanford, Fordway
G-Cloud is quite unusual in that you can put any service you like up there, but it has to be something the potential customer base actually wants. We've got 17 or 18 discrete services defined on G-Cloud but the vast majority of our revenues come from just three, with two newer ones starting to gain traction. We've got 12 services that I don't think we've transacted anything with. Just because you're on the framework, that doesn't mean you're going to get any business at all.
Secondly, once you post your product and its pricing, the potential buyer can compare everyone in the market that is offering a comparable service. So you have to make sure it is not only compelling but priced correctly. We have a near full-time member of the marketing team whose job it is to make sure our service descriptions are up to date.
The third thing is that you have to understand once you've published in G-Cloud that there is no flexibility. They buy the service you've defined, or they don't buy anything. You have to be very open, honest and clear on what your service is. The biggest thing we've found over the years is making sure what you've put in is well defined and accurate. It's a catalogue, and if there are 50 comparable items and yours doesn't look the best the customer isn't going to buy it.
What's the biggest lesson you've learned in your G-Cloud journey?
Keeping it up to date, and evolving your services. One of our services in G-Cloud 9 is less than half the price it was when we first put it on the framework, firstly because we knew the customers wanted it but it wasn't selling and secondly because we worked out a much more effective way of delivering it.
What is your biggest G-Cloud bugbear?
The [lack of] flexibility. And secondly, because it's a catalogue you can get quite a lot of time wasters. It's very easy for people to run searches and enquiries and we get a lot that don't turn into business. But generally we see it as a very positive framework.
How can G-Cloud be improved?
There is a very low barrier to entry for G-Cloud and actually I'd like to see the barrier for entry and definitions being tightened. At the moment you can self-certify. This is more advice for other suppliers, but if you've self-certified, you've got to be able to prove it. A lot of people have made the mistake of thinking that because they're on the framework, business will come.
How concerned are you that more G-Cloud spending is shifting towards the big consultancies like Capgemini and Deloitte?
The big boys were slow to respond but have woken up and worked out how to use the framework. There are certain organisations that need to deal with companies of that size. You just need to go after the appropriately sized customers that are suited to what you can deliver effectively.