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Industry group flags up G-Cloud anxieties

03/11/15

Eurocloud UK says rule changes will hinder public sector take-up of cloud services

A grouping of cloud computing suppliers has claimed that changes in the rules on the G-Cloud threaten to restrain the adoption of services and make it harder for small and medium enterprises (SMEs) to compete in the market.

Cumulus_clouds_in_fair_weatherEurocloud UK, which claims more than 50 member companies, has published a warning that some elements of the latest iteration of the G-Cloud are incompatible with the pay-as-you-go subscription model, and that these could discriminate against similar suppliers.

Its G-Cloud working group has been examining the issue and said there is a particular concern about the ability of buyers to expand their adoption of a solution by more than a fifth of the original contract value.

Neil Bacon of Global Introductions, a member of the working group, said: “The Crown Commercial Service has imposed a 20% restriction on how much a cloud consumer may scale their service. Any increase in scale beyond the 20% limit would require consumers to retender via G-Cloud.

 “It is inevitable this will deter buyers from using the G-Cloud framework, because it actively discourages a pay-for-what-you-use principle and will prevent buyers from achieving economies of scale as they roll out new cloud services.

“Buyers are perfectly capable of assessing pricing for their potential needs when they make their initial G-Cloud evaluation. If a buyer has assessed best value across their expected demand parameters, whatever the scale increase, why force them to re-tender? This 20% rule is just bringing back time-wasting procurement bureaucracy that G-Cloud aims to banish.”

Throwback

Bacon also expressed concerns over the introduction of an option for time-limited discounts, saying it undermines price transparency and is a ”throwback” to one-off deals negotiated privately.

“It allows a handful of suppliers to tighten their grip on the market and disadvantages the SME suppliers that have been brought so successfully into the government’s Digital Marketplace,” he said.

In response, the Cabinet Office said to UKAuthority: "G-Cloud has revolutionised government IT, with spend through the framework now reaching over £800m - half of which is with SMEs. We're always improving the framework to make it easier for suppliers and buyers to use and will consider this feedback carefully."

Despite the criticisms, Eurocloud UK said it is “100% committed to the success of G-Cloud”, and acknowledged it has given SMEs and new entrants a chance to do business with government.

Benefits

In a survey carried out earlier this year, 30% of participants said the G-Cloud had helped them to increase turnover by 20%, and 25% said they had employed more staff.

Phil Wainewright, the organisation’s chair, said: “EuroCloud is keen to avoid rule changes that may damage how useful the framework is for buyers and suppliers, through greater engagement with the G-Cloud team.”

Pictured: Cumulus clouds in fair weather by Michael Jastremski - legacy.openphoto.net. Licensed under CC BY-SA 2.0 via Wikimedia Commons

 

 

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