G-cloud listing now 'imperative' for Government IT suppliers under 'cloud first' policy, says expert

Out-Law News | 07 May 2013 | 2:25 pm | 2 min. read

Suppliers must focus on providing IT services through the cloud at competitive prices if they want to win contracts from Government in future, an expert has said.

The Cabinet Office has announced that Government departments buying IT products and services will now be obliged to consider solutions offered by cloud providers before they can consider alternatives.

IT and technology law specialist David Isaac of Pinsent Masons, the law firm behind Out-Law.com, said that the new 'cloud first' policy would have an impact on suppliers. He said that companies hoping to win Government IT contracts will have to offer cloud solutions and that it will be "imperative" for them to become a listed supplier on the 'G-Cloud' frameworks.

The G-Cloud system allows public sector bodies to gain access to services being offered by the listed suppliers during a set period.

"Suppliers need to be alive to the push by the Cabinet Office to require Government departments to use off-the-shelf cloud solutions to save money," Isaac said. "Suppliers will be left behind if they do not offer cloud solutions that meet Government needs."

"The Government has so far run three different competitions in a bid to find suppliers that can offer IT services to departments and other public sector bodies through the cloud. IT suppliers need to meet the qualifying criteria detailed in future such procurements to become a listed supplier if they want to gain work from the Government. Fundamentally this will involve ensuring that the cloud-based services they offer are aligned to Government requirements and available at a competitive price," Isaac added.

Under the new 'cloud first' policy, Government departments will only be able to deviate from using cloud-based IT solutions where they can show that alternative offerings offer "better value for money" than the products and services available through the 'CloudStore', an online marketplace for cloud IT services.

Cabinet Office Minister Francis Maude said that government IT costs were "still too high" but that increasing the procurement of IT products and services through cloud computing was "one way to reduce them". Other public sector bodies will be "strongly recommended" to adopt the 'cloud first' policy too, the Cabinet Office added.

"The formal introduction of a ‘Cloud First’ policy will drive wider adoption of cloud computing in the public sector, boosting business – and furthering savings and efficiencies – through the government CloudStore, which is a quicker, cheaper and more competitive way for the public sector to buy IT," a Cabinet Office statement said.

"In future, when procuring new or existing services, public sector organisations should consider and fully evaluate potential cloud solutions first – before they consider any other option. This approach is mandated to central government and strongly recommended to the wider public sector. Departments will remain free to choose an alternative to the cloud if they can demonstrate that it offers better value for money."

The Government also announced the launch of its latest 'G-Cloud' procurement framework. The framework, dubbed 'Giii' in acknowledgment of the fact it is the third framework of its kind, enables public bodies to purchase more than 5,000 IT services offered by 708 companies. The Cabinet Office said that 368 of the firms were "new to G-Cloud" and that 80% of the total are small or medium-sized enterprises (SMEs).

"Sales from G-Cloud are rising steadily, with cumulative spend now over £18 million – two-thirds of it with SMEs," G-Cloud programme director Denise McDonagh said in a statement. "This is still small relative to overall government IT spend, and the transition to widespread purchasing of IT services as a commodity won’t happen overnight."

"The adoption of a Cloud First policy will give added impetus for Whitehall and the wider public sector to move in this direction – complementing our ongoing work to encourage Cloud adoption and to help buyers adapt to this way of purchasing IT, which is already showing results," she added.

"Off-the-shelf products from the Cloud can be up to 30% of the cost of bespoke solutions. Today’s launch of an expanded G-Cloud framework, with more companies offering an even greater range of products and services, will only enhance the cost and innovation benefits of a more competitive marketplace," McDonagh said.