Why Wasn’t 2012 The Year Of The G-Cloud?

Despite the tidal wave of interest in the Cloud, CloudStore, the government’s new initiative for procuring cloud services, also known as the G-Cloud, has been slow to catch on since its launch in February 2012.

Considering its anticipated benefits, including ease of sourcing and procurement which offer a projected savings of up to £180 million by 2015, the government is hoping this is simply a matter of being slow off the starting block.  This article looks at who is actually using G-Cloud, who isn’t and why not.

The Early Adopters

Public sector organisations like the Department of Work & Pensions; Department of Culture, Media & Sport and the Ministry of Justice have already embraced G Cloud. Others, like the Metropolitan Police, are definitely planning to get on board.

Looking at some numbers, there have been some 100 deals through the CloudStore involving 50+ government organisations for a total of just over £2 million sales – remarkably small considering the number of suppliers and government organisations involved.

For their part, the Metropolitan Police have plans to make use of CloudStore for the proof of concept phase of some new system procurements, and will very likely turn to it again when they replace their existing outsourcing contract – providing, of course, that CloudStore can deliver the necessary services cost effectively.

For all those who are either using or planning to use CloudStore, there are many more who are not – despite the cabinet office’s urgings.  To this end, in October the government launched G-Cloud II, ushering in a raft of additional suppliers, many of whom are SMEs.

Given that cloud migration in the commercial world is rapidly becoming an inevitability, this begs the question:  What‘s behind this apparent sluggishness in G-Cloud adoption by the public sector?

Procurement Paralysis

To begin with, a number of those who are migrating to the Cloud are continuing to procure services via the traditional European Journal route rather than availing themselves of the new official G-Cloud channel.  This could be because the requirements have security or other demands not available through CloudStore or that the Cloud element is only part of a larger procurement.

Many other government IT departments, however, are suffering ‘procurement paralysis’.  They believe in the Cloud’s business advantages but can’t work out when or how to move forward.  Indeed the greater the hype about the cloud, the greater the confusion. Some are not yet convinced about the potential value of cloud services.  Others are exploring their options but are struggling to discriminate between the plethora of similar offerings available.  Still others are nervous about migrating to the cloud because they don’t know what the impact will be on downstream IT operations and budgets.

Sweating Assets

Cost is a key reason for caution. These days many CXOs are unwilling or unable to invest in new projects no matter how promising, unless and until mandated, or proven to be financially advantageous. Thus data centres, desktops, networks and all other IT systems and equipment are being ‘sweated’ until they no longer function in order to maximise return on investment before replacement.

Obviously, where systems have just recently been upgraded or replaced, the case for a sudden move to the cloud makes little sense from a return on investment (ROI) perspective.

When to Jump In

For those with a more mature investment cycle the question becomes: When IS the right time to move to the cloud?   The answer may not be straightforward.

First, one has to take into account the remaining through life costs (TLC) of current systems, their associated service levels and staffing requirements. This data then needs to be compared with cloud service provider costs, service levels and staffing requirements (presumably lower) as well as the costs of migration.

Somewhere in all this there is an optimum point at which to make the switch to a CloudStore solution, but only when the future looks more promising than the past.  To work out all these highly complex probabilities, costs and timings, the use of virtual modelling techniques with ‘what if’ scenarios to help clients forecast ‘real world’ and highly accurate outcomes becomes a necessity if timing and costs are to be optimised/

Picking a Winner

Having decided it’s time to embrace the cloud, how do CXOs  steer a course through the myriad of different systems and services to identify which will best suit their organisation and offer value for money?

Delving beneath the marketing hype the task is to accurately identify suppliers’ deliverables and the project’s overall costs: not just the upfront costs but the transition costs (which vary from one vendor to another), and the long-term impact on staffing, existing systems and enterprise operations.

This may require the help of an IT sourcing specialist since getting a granular insight into the specific services or system components of a vendor, then comparing SLAs and price/performance on an apples-to-apples basis is notoriously non-transparent.

That said, with some 700 suppliers who have already been through a preliminary vetting for G-Cloud compliance, CloudStore would seem a logical place to start this process.  Yes, perhaps traction is just a matter of time as the momentum of Cloud migration increases.

Robert Saxby is director of consulting services at consultancy firm ImprovIT

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