SME hails G-Cloud framework after Ministry of Defence deal

Profile picture for user ddpreez By Derek du Preez February 23, 2016
INOVEM’s CEO and CTO Peter Jackson has said there would have been absolutely no way that the deal would have been done two years ago without the G-Cloud.

INOVEM, an SME providing public cloud solutions in the UK, has won a deal with the Ministry of Defence in the UK to provide its Kahootz collaboration tool to the department, which will be used to communicate and work with companies in the MoD’s supply chain.

Interestingly, the Ministry of Defence chose the tool via the Digital Marketplace (through the G-Cloud framework) and didn’t actually meet with INOVEM until it had been whittled down as the winner from a shortlist of about 20 providers.

The G-Cloud framework was set up to provide a transparent list of security-approved providers, via an online searchable storefront, to allow fairer competition in the government IT supplier marketplace. Traditionally all deals would have gone out to tender (which can be very expensive) and given to one of the big SIs operating in Whitehall.

The fact that this security-sensitive department has chosen a public cloud solution, provided by a UK-based SME, which was selected without any face-to-face contact during the procurement process, is quite a feat.

According to INOVEM CEO and CTO Peter Jackson, credit should be given to the Digital Marketplace for opening up access to smaller providers, given that just a few short years ago a deal like this wouldn’t have been possible.

And whilst we do spend a fair bit of time critiquing the Government Digital Service for how tools like the Digital Marketplace could be improved, it’s also worth highlighting the good stuff to show that progress is being made.

The deal

I got the chance to speak to Jackson this morning to understand how the deal came about. He said:

The department had a requirement to find cost effective ways to evolve and work with SMEs in the defence supply chain and support network. So they were looking for an easy to use, commodity cloud solution.

They did the procurement via the G-Cloud, the Digital Marketplace. They followed the process which is to draw up a long list of potential vendors by whatever search term they used (probably collaboration) and drew up a shortlist of 20. Then they reviewed each of these against various metrics and then whittled it down to nine vendors.

At that point they set up a free trial for all of those and assessed each of the products themselves. They looked at things like security features, resilience, commercial terms and pricing.

Jackson said that the “great thing” was that the only contact INOVEM had during this time was an email from the MoD requesting that they carry out a free trial, which they could have done without any permission from the company. Jackson said:

So it was quite an unusual procurement, especially for the MoD in that they didn’t have much contact with the vendors.

I don’t think we spoke to them until they had actually assessed their 9 shortlisted suppliers, after which they narrowed it down to two or three. We did then did a one hour conference call with them to nail down a few questions and answers and do a short presentation.

Then they selected Kahootz. But the first time we met them face-to-face was after the award of contract. What’s unusual about this is firstly the MoD doing the procurement off the G-Cloud. But it’s also an endorsement of the G-Cloud process using an SME to deliver quite an important service. And also them adopting a cloud first policy.

One of the other things that appealed to the Department, which works in INOVEM’s favour in a lot of the deals it does, is that it has true cloud-based commodity pricing. Unlike a lot of the popular cloud vendors out there, which charge based on set numbers of users that have to be agreed up-front, regardless of whether they use the service or not, INOVEM charges on active users only.

Jackson said:

We want to deliver really cost effective services. Typically a government department would do a procurement and say right we need 2,000 users and then they’d pay for 2,000 users on day one, most of which would sit dormant for a long time.

We offer true commodity pricing. That works in two ways - one, you just pay for as many users you want, you don’t have to order in blocks. But also we offer our active user licence, which is people just pay on a monthly basis for the people that actually access the service. So the start-up cost to the MoD is incredibly low and the number of users will increase over time.

The success of the G-Cloud

With news that G-Cloud sales have now reached over £1 billion, with a significant chunk going to

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SMEs, it can’t be denied that it is a success story in Whitehall. Particularly given the challenges that it faced in breaking down long-established procurement practices that weren’t particularly susceptible to change.

Does Jackson think this deal would have happened without the G-Cloud?

Absolutely not. No. Before the G-Cloud existed a few years ago we had a very limited access to government because the market was wrapped up by the big systems integrators. Whilst departments were interested in our service, our cost effective service never really made it interesting for the systems integrators to bring us in. There wasn’t enough in it for them.

The G-Cloud for the last few years has given us a reach into government. It’s a contract that definitely wouldn’t have happened, it’s impossible to imagine the MoD working with us just two years ago.

However, Jackson did note that there is still one area of contention for buyers and suppliers within the framework - one that has been brought up time and time again since it was launched. And that’s the two year time limit on contracts.

The two year limit was introduced to ensure that vendors didn’t trap departments into deals and software products that they felt they couldn’t get out of. Equally, it should give departments a bargaining chip at the end of every two years to ensure that the vendor is providing a top level of service. But there are still complaints that don’t seem to be going away. Jackson said:

I think one of the limiting factors at the moment is the two year contract period. I think moves are underway to address this. It leaves purchasers in a bit of a quandary, where they want to buy a service, adopt it whole heartedly and use it for a sensible period of time. T

The G-Cloud puts a two year limit on contracts. And then they have to go to market again. And whilst they might end up using the same products, I think ideally they would like more reassurance that they could use the software for longer than that. I don’t think they don’t want to have to go to procurement again every two years. It works against the buyers occasionally.

My take

All in all, a great success for the INOVEM team and the G-Cloud framework. It’s also good to see departments like the Ministry of Defence, which one would assume to be more traditional and stringent than others, pushing ahead with cloud products. More of this please.