How The UK's G-Cloud Programme Would Benefit Europe

Focus Area

The G-Cloud, which launched in 2012, essentially provides an online Digital Marketplace where public organisations can find different services offered by a large amount of suppliers that are part of the G-Cloud Framework Agreement. The G-Cloud has definitely had an impact on the way the UK public sector buys commodity IT services and the government has been commended on the strides it has taken to refine the procurement and certification process through the G-Cloud.

A research report issued by IDC at the end of last year, claims the UK government is “ahead of the curve” when it comes to cloud adoption and streamlining digital service procurement practices across Europe.

However, over the past five or six years, western European governments have certainly embraced and realised the potential benefits of cloud computing. Whilst initially deemed as a way of saving considerable cap-ex now Government CIOs are starting to see the wider benefits of cloud computing, like improving accessibility to applications and data from remote locations and multiple devices, as well as the extra scalability and elasticity to deal with peak workloads.

The time is ripe for desperately cash-strapped European governments to put in place a G-Cloud style framework to not only save vast sums but also reap some of the rewards the UK G-Cloud programme has delivered.

Market sector targets

European-Government.  By implementing a G-Cloud Framework similar to what the UK have put in place, the programme has the potential to save European governments billions. For example, I’ve calculated that the UK government should actually be aiming for a 70-80% savings on their ICT spend from the G-Cloud. If done properly, G-Cloud has the potential to be hugely disruptive and could be saving the government £12bn per year by 2020.

Measuring efficiencies and impact

Working For Government

The G-Cloud has made it clearer, simpler and faster for the whole of the public sector to buy digital products and services when they need to. By creating a marketplace of quality suppliers of all sizes, who work in agile ways, to supply and work with government.

G-Cloud has facilitated four types of savings for government:

•       Published prices in the Digital Marketplace are transparent and comparable across providers. This has enabled the government to buy products and services at lower prices;

•       Reduced procurement costs for the buyer. The procurement of a service is done directly with the actual supplier under the framework agreements of G-Cloud, without the need for intermediaries.

•       Benefits from adopting agile solutions

•       Creating deflationary pressure in the wider market

Opening Up The Market To SMEs

System Integrators have traditionally held a cast iron grip on the public sector IT market for years, imposing long, expensive contracts with little room for innovation. G-Cloud has helped to widen the playing field and open up public sector opportunities to SME suppliers like Memset who not only bring lower prices to the market, but are also much more agile by nature.

Saving Time

G-Cloud’s other hailed success is the reduced time it takes for procurement by public sector buyers of off-the-shelf cloud services. For example;

The average time to obtain a cloud service via G-Cloud is 18 days as opposed to 171 days using the conventional OJEU procurement process.

A Single Market for Services

The European Council has called for all efforts to be made for Europe’s industry to regain momentum in digital products and services, describing an urgent need for an integrated single digital and telecoms market, benefiting consumers and companies.

In order to take advantage of the full potential of the digital economy the Council stated that Europe needs investment and the right regulatory framework to enable infrastructure roll out of high speed broadband and 4G whilst maintaining technology neutrality.

In addition, investment in a Framework for actually selling these services will be to all our benefits. I passionately believe that we should not be afraid of competing with each other, rather that if we can foster international excellence in low-cost, high-security, high-efficiency cloud services, whether IaaS, PaaS or SaaS, in Europe it will be to all our benefits.

The old guard (systems integrators etc.) are protectionist. They expend huge efforts to preserve dwindling revenues, especially from government. What they fail to understand is one of the foundation stones of my part-time doctorate; that if you make something a lot cheaper, faster, better and more efficient, in the long-term markets actually end up spending more on it.

In technology’s case this increased long-term spend will represent orders of magnitude efficiency gains on where we are now and much greater savings through transformation of public services. In the short term, however, the public sector’s spending on technology should fall significantly as the market moves away from consultancy towards automation.

This message should be especially poignant for Europe. The austerity measures have barely started biting; we are at the tip of the iceberg. The way we, Europe, will save the public purse is through technology.

By working together we can form the foundation of the new European cloud industry, while at the same time saving the desperately cash-strapped European governments huge sums and boosting the European economy. It is our time!

How is cloud disrupting the market?

The G-Cloud public sector cloud services procurement framework has been active for two and a half years and the numbers speak for themselves. To date, over £350m worth of sales have been made through the framework, with SMEs securing roughly half of the contracts. Even with the conservative estimates this represents a 50% saving over what the government would have paid in the old world.

The framework has definitely started to level the playing field and open up the market for SMEs. Sales will continue to grow as the public sector embraces the flexibility and potential savings available through cloud computing.

Links and references

http://www.katescomment.com
http://www.idc.com/getdoc.jsp?containerId=prUK25277214