Whilst we at diginomica have been pretty avid supporters of the G-Cloud framework over the years, which has been designed to break down barriers to entry for SMEs wanting to win work with government, and simplify complex procurement processes by providing an online marketplace for cloud services - it can’t be denied that there is a growing tension around the framework’s continued success.
And although G-Cloud has grown to become a £1 billion+ business, which has undoubtedly done good work, there is growing frustration that it hasn’t gone far enough to break the cycle of buyers handing out deals to their mates.
In addition, there has been recent criticism around the 2 year contract terms required by G-Cloud, the old procurement buying habits dying hard and suppliers disqualifying themselves by making inept submissions.
And it seems that the criticism isn’t letting up. This week one of the most vocal supporters of the G-Cloud, Kate Craig-Wood, managing director of IaaS provider Memset, has spoken out that she believes that the “dream is dying”. Craig-Wood also was involved in the early design of the framework back in 2009 and has been one of the main voices in the G-Cloud discussion since its inception.
Basically, if you follow the G-Cloud, you know who Kate is. Which makes her backlash against the framework all the more significant.
Craig-Wood’s complaints are varied - ranging from the G-Cloud’s failings in dismantling the government’s ‘boys club’, with deals still going to the same people, the government’s lack of investment in the Digital Marketplace, as well as the Cabinet Office’s lack of enforcement over mandates that were intended to drive business to the G-Cloud.
In a blog post, Craig-Wood said:
I got involved in G-Cloud back in late 2009 as their technical architecture co-lead on Phase II of the project. They were exciting, heady times – we had a dream of punching through through archaic government procurement requirements with an online “App Store” and use the unleashed the power of highly-commoditised Cloud services to both improve the quality and reduce the cost of government IT.
I have been a vocal supporter ever since, even in the face of depressingly slow progress, but today I have finally had enough. The dream is dying.
Craig-Wood went on to say that Memset is a “relatively tiny” business turning over less than £10 million a year, but has made massive investments in pursuit of government business via the G-Cloud Framework. For example, the company has spent £2 million on a high security data centre, plus has spent hundreds of thousands of Pounds enhancing and upgrading the company’s security and compliance stance.
These investments, while affordable, have stolen investment from other areas of our business. Our growth over the last few years has slowed as a result. Our faith in the G-Cloud dream has caused us to innovate less and create fewer jobs.
At the same time, we are seeing an utterly pitiful return via G-Cloud – about £100k/year. We do have a fair bit of other government business now, but not via G-Cloud and still only 6% of our revenue overall. Nowhere near enough to make it a profitable venture.
The blog states that the “most galling fact” of all is that Memset hasn’t had any new business from G-Cloud since 2013. And with the eighth iteration of the framework due next week, Craig-Wood and Memset are asking “whether it is worth it at all”.
CriticismsCraig-Wood doesn’t believe that Memset’s problem on the G-Cloud is the cost of her company’s product, as Memset specialises in using open source software and generic hardware to provide high-security, low cost IaaS. She says that Memset is “definitely cheaper” than its competitors and has an “outstanding track record”.
Instead she puts some of the problem down to Memset’s sales approach, as the company doesn’t really do pro-active selling, and rather just relies on lead conversion. Craig-Wood said:
We don’t have padding in our prices to afford armies of salespeople running around, nor deep-pocketed backers willing to allow us to make losses.
More to the point, a big part of the point of G-Cloud was to get away from an onerous, expensive sales/procurement process with buyers able to self-service with minimal interaction – because we’re all basically selling the same stuff!
After reading the blog, I had a conversation with Craig-Wood where she explained that Memset had tried the traditional approach of hiring some sales people, but she said that she didn’t feel comfortable with this and that it shouldn’t be required under the G-Cloud. The G-Cloud was meant to give SMEs visibility into buyers, without having to compete with the relationships formed by the big SIs and vendors. She said:
We’ve experimented with getting the little black book type salesman in. It wasn’t a fun experience. At the same time, in the case of one of them, they did win us some business. And how it happened is they took their mate down to the RAF Club and plied them with some whiskeys and a deal came out. It just made my heart sink when I heard that. I’m not really willing to play that game, it’s not us.
Hardly a new era.
Complementary to this, Craig-Wood had some choice stern words about the Digital Marketplace - the online front-end that houses the G-Cloud framework. She claims that it is “broken” and that most buyers only go there once they have already worked out what they want to buy and from whom - “perhaps in part because it is so hard to actually find what you’re looking for!”.
In our conversation, Craig-wood said:
At the same time they’re still massively under resourced. The reason that the Digital Marketplace is still so rubbish is that nobody is actually bothering to spend any money or effort on it. It’s a travesty when you consider how much money is going through that. Money is not reinvested.
And that’s been an issue and a complaint from the very beginning. One of the reasons I’ve put a blog post out there, rather than going to talk to them, is that I just don’t think there will be any point. They might get back to me, but even if they do, whatever they say, it probably won’t happen.
Memset is also questioning why the ability to compare like-for-like prices and to see and provide public feedback on the Digital Marketplace have yet to be introduced - these are capabilities that have been spoken about since the G-Cloud’s very inception and many people think that they would help boost vendor performance, drive down prices and give buyers some guidance in the discovery process.
Instead we have a marketplace where you only get noticed by “spamming” by including the right keywords in your text and getting partners to re-post your services to get multiple listings of the same thing. It is like the bad old days of search engine SEO! At the very least the entries’ order should be randomised.
Perhaps most importantly, Craig-Wood said that the government is completely “ignoring” its ownmandates. Mandates that were introduced to help drive the purchase of cloud, of commodity services, to drive down costs and disaggregate systems. She said:
The bit of propaganda that we did believe that I don’t think we can be blamed for, is that government would obey its own mandates. They seem to just completely ignore it.
Cloud First mandate? LOL! Only 20% of G-Cloud spend last year was IaaS/PaaS/SaaS. Open Standards mandate? This one isn’t even funny. We’ve been running OpenStack services for government for over a year and entered them in G-Cloud 7 (last November). OpenStack – in case you’ve been living under a rock – is the de-facto Open Standards, Open Source IaaS solution; the only thing that can possibly hope to stand against the might of AWS’s IaaS and Azure’s PaaS in the long term.
We are one of only a handful of suppliers offering it on G-Cloud at present, but still no interest.
Memset and Craig-Wood believe that if departments are buying technology that isn’t cloud or isn’t open, there should be a requirement to explain to the Government Digital Service why that is the case. And if they can’t explain or do it anyway, they should be penalised.
Craig-Wood says that her disillusionment with the G-Cloud is partly because of frustration with Cabinet Office propaganda and partly because of her own naivety in the early days.
Whilst I still continue to believe that the G-Cloud could play a critical role going forward, I don’t think these criticisms should be ignored. And I hope that the Cabinet Office will come out and publicly state what it is going to do to address them. This stuff is important.
I’ll leave you with Craig-Wood’s words:
We passionately believed in the dream of G-Cloud and kept doing so despite the goal posts being repeatedly moved, the marketplace continuing not to function properly and buyers continuing to behave in the same old ways.
We have learned a lot along the way and, thanks to our enhanced security posture, are attracting unexpected business from sectors such as finance and healthcare as well as government business through other routes. Having poured so much of myself into G-Cloud though this is small comfort.
We’re not turning our back on government. We’ll still be here, helping those enlightened few among the public sector to save money with high-efficiency, high-security Open Standards IaaS/PaaS, but it will be on our terms. I’m tired of chasing a vision that nobody else seems to be committed to.
I have dreamed a dream, but now that dream is gone from me. :’(