The Government’s plans to save on computer services in the public sector, will force public bodies to move to shared resources and the cloud, according to commentators responding today’s budget.
Last month George Osborne promised to cut £95 million from the IT budgets of public sector bodies, while making other cuts to reduce the UK’s budget deficit. The Cabinet’s chief enforcer, Francis Maude, has told civil servants to re-evaluate all IT contracts in order to meet this target, and all contracts worth £1 million or more have been frozen until they can be re-assessed.
The Conservative / Liberal Democrat governmentis lambasting “wasteful” failures by the Labour government, and it seems that IT will be hit hard by budget cuts. However, Anderson believes that organisations still need up-to-date IT, or services to users will suffer. Total government IT spendwas around £17 billion in 2008/9 according to public sector IT analysts Kable.
Anderson predicts that authorities will move to shared frameworks, which allow multiple authorities to shoulder the cost of IT upgrades, and the development of resources and best practice. “If the need for each organisation to maintain all its own specific systems and infrastructure can be removed then real savings, without compromising service levels, is a realistic expectation.”
“IT remains a critical vehicle for the efficient delivery of services to the public,” agreed Andy Burton, chairman of cloud-rpomoting body, the Cloud Industry Forum, who is also chief executive of cloud provider Fasthosts. “What we are seeing with the immediate reduction announced in May and the subsequent squeeze in the Budget has been to dramatically transform the IT procurement landscape in the public sector.”
Not surprisingly, Burton’s answer is cloud computing. “We are confident that the advance of cloud computing will be a tremendous enabler to ensure that required IT solutions can still be implemented but without the significant capital costs associated with the more traditional supply models. Local and central government have more technical options available to them today than in years gone by, and the thoughtful application of cloud based services offer a credible and affordable way to save costs and scrutinise the ways in which IT is procured and delivered.”
IT procurement has shifted form the Treasury to the Cabinet Office, and is being overseen by business leaders including Tate & Lyle chairman Sir Peter Gershon, Tesco executive director Lucy Neville-Rolfe and Dr Martin Read, a non-executive director for insurer Lloyd’s.
“We want a slim but strong centre that can drive down the cost of government, so protecting as best we can the crucial front line services on which our citizens depend,” said Cabinet Office minister Francis Maude MP in a statement. “By taking this really tough stance on inefficiency and waste, we can tackle Britain’s massive budget deficit and bring order back to the country’s finances, whilst protecting vital frontline services.”
Analyst IDC reckons that Cloud IT services are currently worth £10.7bn globally and estimates they will grow to around £27 bn by 2013 (compare this to Gartner figures which say cloud services are now worth £46 billion and due to grow to £100 billion by 2014).
Gartner predicts that the UK will become the second largest user of cloud services, driven in part by the shift in public sector IT that has now begun.
The Cloud Computing World Forum is taking place in London’s Olympia on 29 June to 1 July. It features talks from CIOs at companies including The Telegraph, Rentokil (a big Google Apps user), British Airways and the House of Commons.
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If it is so cost effective to move to cloud and hosted services why are commercially successful companies like ebay and Google building their own data centres and moving away from it?
If an organisation only requires 4 or 5 server cabinets, cloud and hosted facilities are a cost effective option however once an organisation has more than this, and most Local Authorities are running between 10 and 30 cabs, it becomes more cost effective to house their own data centre once spread over 3 years or more.
Since most of us are under the assumption our Local Authorities will be around for a bit longer than 3 or 4 years moving to cloud doesn’t really work.
The situation now is Cloud is the new “big hype”, politicians and the media have got hold of it and with their wealth of technical understanding are banding it as the be all and end all of IT solutions.
Don’t believe the hype and do some good research before choosing to take the Cloud path.
The thing about the 'cloud' is that it is sopmething that is maturing and being able to offer services that aren't simply the hosting of a dedicated server. With the pressure on the government bodies meaning they have to cut costs, infrastructure outlay and administration costs can be a big part and if the 'cloud' means they can do this without outlay, administration, and include the ability to present better shared services then this is something that really wasn't an opportunity before. For example, to help reduce IT costs we have always offered PC Power Management solutions but now we offer this from the 'cloud' so that almost anyone and everyone can get this without the difficulties previously associated. We need to stop labelling the 'cloud' or trying to give it a specific definition, instead we all need to take advantage of the newer capabilities this evolution brings us.