Has G-Cloud really been a success?

With the third generation of its core framework now live, just how successful has the G-Cloud programme really been?

The Giii framework was issued this week with 708 suppliers – around 83% of them SMEs - on it, offering a total of more than 5,000 services. This compares with 461 suppliers on the second framework, 75% of which were SMEs.

Total spend through the CloudStore reached £18.2 million by the end of March, according to the latest statistics, with £7 million sales recorded in that month alone, the biggest monthly figure to date.

The number of transactions is also on the up. Some 280 purchases were made in March, compared to 180 in February and 150 in January.

A drop in the ocean

But it's all - as the more cynical and luddite leaning individuals on both the buy and sell side never cease to point out - a drop in the ocean of overall ICT spending in the UK public sector.

With the transparency philosophy of the digital age now in place across government, there's a lot more data that can be analysed to detect underlying trends - which is exactly what Andy Powell, Head of Product Research at Eduserv has usefully done.

In a great blog post that I encourage you to devour in full, Powell breaks down the numbers to date and comes up with some interesting insights, some highlights of which are:

• The average spend across all the months of operation of the Cloudstore is a low level £20,157.01.
• There are examples of bigger investments though such as Defence Equipment and Support which spent £800,000.00 on ‘MOD AWARD Enterprise Licence and technical support’.
• Of the 340 suppliers who were on the Gii iteration of the G-Cloud framework, 108 of them got business through it. 
• Which in a 'glass half empty' mindset means 232 - over twice as many - have yet to break their duck on the G-Cloud.
• Two Agile consultancies lead the pack: Emergn Ltd has done £2,910,080.25 worth of business, followed by BJSS on £2,363,357.79. 
• The top buyers to date have been: the Department for Work and Pensions (£1,793,176.20), the Ministry of Justice (£1,726,658.46), NHS Connecting for Health (£1,569,509.52) and the Cabinet Office ( £1,303,250.84)
• Of the four lots into which the G-Cloud framework is split, lot 4 (Specialist Services aka consultancy) has seen the most action with £12,228,282.99 of business. 
• Lot 3 (Software as a Service) comes in at £5,079,738.67. 
• Lot 1 (Infrastructure as a Service) reports £587,300.91 of business while Lot 2 (Platform as a Service) is slowest to date on £348,815.45. 
• The Cabinet Office is putting its money where its mouth is, especially on the hosting front with a very healthy proportion of the Lot 1 (IaaS) spend coming from there.

Powell's own conclusions from all this? He states:

"Individual transactions remain small… we’re seeing more of them but I think we need to see them grow in size as well as growing in number before we can really say that G-Cloud has been a success. The bulk of the spending is on specialist services (consultancy) rather than IaaS, PaaS and SaaS. In the IaaS space, the Cabinet Office are far and away the biggest consumer of services. It’s good to see them leading from the front! I haven’t done any detailed analysis of this but there seems to be some evidence of sales to non-government organisations thru G-Cloud which I think is quite positive."

Patriot games?

I tend to agree with Powell overall. It's definitely interesting to note that interest in Agile development methods is reflected so strongly in the spend to date.

The IaaS and PaaS numbers will rise pretty sharply I imagine, although the continued absence of Amazon and Google as participants in the framework is discouraging.

Joe Dignan over at research house Ovum has an interesting take on the continued absence of such public Cloud giants:

"There is growing frustration with these providers' reluctance to join one of the UK government's flagship programs, perhaps reflected in the diminishing number of photo opportunities with UK Prime Minister David Cameron and Deputy Prime Minister Nick Clegg. Ovum understands that both companies cite the USA Patriot Act as a reason for not engaging with G-Cloud, but both Microsoft and Salesforce, which receive as much legal advice as they do, have signed up to it.

"Perhaps the reason for their reluctance is that they have a business model with which they are comfortable and no plans to develop value propositions specific to the public sector. Another possible reason is that the contracts that are currently going through G-Cloud are not yet of a large enough scale to attract their attention. It has also been suggested that the biggest difficulty is the need to sign up to offering an unchanging product for two years.

"Companies such as AWS pride themselves on the continuous development of their products, with new functionality being added all the time. It will be interesting to see if the new public cloud first policy changes their position."

A taxing question 

It is to be hoped that it does.  G-Cloud programme director Denise McDonagh does note that there are plenty of other IaaS and PaaS alternatives out there.

But it is taxing to see the current close links between Google and the Conservative party, not to mention CEO Eric Schmidt's ongoing advisory role to Prime Minister David Cameron, without wondering why the firm won't sign up to the administration's most radical ICT procurement strategy.

Maybe something to discuss at Number 10 in between visits to the Public Accounts Committee to talk about taxes?

But while we're waiting for that happen, check out Powell's analysis for yourself and let us know what conclusions you come to.

diginomica will be attending the Think G-Cloud conference in London on 18th June. Public sector professionals can register free of charge here.