Wednesday, January 04, 2012

gCloud 2012 ... What Now?

In the run up to Xmas several hundred suppliers were finalising their submissions for the gCloud framework. Many, perhaps most, had almost certainly never dealt with government before and had certainly not tried to qualify for a framework.  gCloud's first achievement, then, is to break the mould and really open the door to government IT contracts (in November, the Government Procurement Service announced that 44% of contracts were now being awarded to small and medium enterprises, aka SMEs.  That's amazing, really, but I suspect few of those contracts were IT related). 

Twitter was alive with just how many expressions of interest had been made in gCloud.  Some 580 last I saw, perhaps more by the end.  Maybe 50-60% of those will actually submit a bid. gCloud's second achievement will be to achieve such a high conversation rate. (I'm guessing). 

Around the end of this month, UK government could have access to 250-300 companies offering cloud services. Submissions that I saw often included ten or more separate offers across the lots.  So within a few weeks, there could be 2,000 or even 3,000 separate cloud services available (some of those will doubtless be the same service offered at IL0, IL2 and Il3). 

gCloud's real achievement is this: completely open visibility of every service offered by those 300 suppliers down to individual prices.  Not just open to customers, but open to suppliers.  

For IaaS it will be possible to compare the price of a virtual machine from, probably, dozens of suppliers. For Lot 4, day rates for staff in every company will be visible.  Radical transparency for sure.    In my time in government it was impossible to find out what any other department actually paid for its IT let alone to see what the market pricing as a whole was.  Just as eBay led to lower prices for commodity items, gCloud prices will be revised downwards as suppliers adjust to this new kind of competition - and new, differentiated services (whether through functionality, ease of transition, better integration or whatever) will appear that can command higher prices. 

Hours will be spent, by customers and competitors alike, looking at what is there. Forget Facebook, the new time sink will be gCloud's pricing catalogue. 

What needs to happen next?

- The Government Digital Service were, last I looked, hosting alpha.gov (and presumably beta.gov) with amazon web services.  Within a month, they should move it to a company on the gCloud framework. If Amazon are on there, they should skip the easy decision and move it to a UK company hosting in the UK. 

- A dozen departments should engage a dozen different companies to produce cloud strategies that, having inventoried what the department has in place, provide a route map to the far cheaper IT that will result from this radical transparency.  The departments should publish those studies to help everyone else see what is possible. 

- One small, one medium and one large department should buy its email service from a gCloud company before the end of June 2012. 

- Five local authorities and one central government department should move 80% (by spend) of their IT to be provisioned by the gCloud framework before the end of this iteration

Achieving just those four targets would be incredible success for this first iteration of the framework. I suspect that whilst success won't look quite like this, by the end of 2012 enough will have been done for outright victory to be claimed and for the second iteration of the gCloud framework (due sometime in the second half I imagine) to receive even greater support both from customers and new suppliers - especially if the process for retaining existing suppliers is simplified. 

Underpinning all of this is the need for government departments to detail how they will buy their IT over the next few years.  When Francis Maude announced that some £25.8bn of IT contracts would be re-procured over the 5 years from 2012, he didn't say what he wanted the new price of those contracts to be. Certainly not £25bn. Perhaps only £12bn? Maybe less.  gCloud is definitely part of that, but isn't all of it - at least not in this iteration.  

The gCloud team have started something here.  Predicting how it will look in 10 years, or even 5, is by difficult of course. But one thing is for sure, markets rarely turn back from transparency once it has been achieved. 

One question that will be increasingly asked is, instead of "why gCloud?" which has been the topic for much of the last 12 months, "why not gCloud?".  Why not indeed. 

2 comments:

  1. Alan, I read your summary of Chris Chant's terrific tlak last year.

    Do you have any comments on viability of contracts for less than one year? In particular, am I righ to think that part of the intention is to avoid the burdens of full EU tendering by keeping contract terms shorter, so reducing cost so contracts do not fall into scope of full tendering rules (before you even get to cost competition through the increased transparency of G-cloud etc)?

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