By Suzannah.Brecknell

16 Apr 2013

The CloudStore is a key part of plans to change the way government buys ICT, but many civil servants don’t even know what it is. Suzannah Brecknell attends a seminar exploring how departments can buy bargains online.

Even the most casual observer of government IT in the last two years will know that big changes are afoot. The plan is to move from a world where departments have large, complex contracts covering all their IT needs, signed with a small number of providers, to one where more suppliers and smaller contracts mean greater flexibility, lower costs and better services.

Central to this move are the drives to make greater use of cloud computing – accessing centrally-hosted services and infrastructure on a pay as you go basis, often via businesses operating outside government – and to buy more products from SMEs. The cross-government G-Cloud programme aims to help departments achieve both these aims; and Andrew Hawkins, business development director at not-for-profit cloud computing specialists Eduserv, told a recent seminar held by CSW and Eduserv that it’s moving “phenomenally” fast.

In just under two years since the programme was launched in its current iteration, G-Cloud has set up a CloudStore – through which departments and agencies can purchase cloud-based services and infrastructure – and run three OJEU procurements to populate this portal with products from over 460 suppliers. Between CloudStore’s launch in February 2012 and January this year, sales worth £7.4m had passed through the portal. Four fifths of those orders went to SMEs, representing 70 per cent of the total sales value.

What civil servants think
Yet awareness about the Store is not keeping pace with these fast-moving developments. A survey carried out by CSW and Eduserv in January 2013 found that over half of the 529 respondents didn’t understand what CloudStore is; and just 15 per cent felt confident that they knew how to use it. Perhaps because of this uncertainty, only a third of respondents thought that the new way of buying services through CloudStore would improve public sector ICT procurement.

Asked about some of the potential benefits of CloudStore, respondents were equally uncertain. Just over a quarter agreed that the cloud computing frameworks available through the Store would help departments save costs, and the same number said they would make it easier to buy ICT services; but for both of these questions, the biggest response was ‘I don’t know’ – a cautious reaction, reflecting the fact that nearly two thirds of respondents from the procurement profession have not yet used CloudStore (the figure is even higher across all respondents, with 81 per cent saying they have not yet used it).

When it comes to saving money, Peter Middleton from the Cabinet Office’s G-Cloud team acknowledges that the cost benefits of CloudStore are as yet unproven. He told the seminar: “We don’t have big reports [of savings] that the National Audit Office will put their stamp of approval on, because we don’t have the resources [to gather and verify data].” However, the G-Cloud team “believes that savings are of the order of magnitude of between about 50 to 90 per cent”.

On the surface, CloudStore should make things much easier for those buying IT services in departments – because much of the procurement heavy lifting has already been done– but the process of buying services from a number of different suppliers rather than one large provider may bring hidden costs and workloads. People often think this shift will need more expertise internally, said Hawkins – but he suggested that “you’ve always needed the internal expertise”. Departments will perhaps need more service management expertise than before, but this is “a shift in type rather than an increase in volume”.

Barriers to using CloudStore
Nearly one in five (19 per cent) of survey respondents said their department was likely to make a purchase through CloudStore in the next year – so what is stopping the remaining four fifths from using the portal? Respondents were asked to rate a list of potential barriers which might stop them using CloudStore. The three most popular answers were: the difficulty of splitting existing services into constituent parts for purchase through CloudStore; a lack of detailed information about services and suppliers; and the risk to continuity of service due to shorter contract lengths (departments can only set up contracts up to a maximum of 24 months from the G-Cloud framework).

The problems around splitting existing services so that they can be moved into the cloud were raised by several participants at the seminar. Barry Jennings, an associate at legal firm Bird & Bird, noted that the CloudStore is an “excellent tool if you’re buying something brand new”, but it’s more difficult if you are planning to stop paying for an existing service and switch it to a new cloud-based provider. Big IT contracts, he said, aren’t set out in such a way that you can easily stop individual sections of them in order to change the way you buy that service.

There is also a question of skills: departments may not have the in-house capability to look across their IT provision and spot the areas which are best suited for provision via the cloud. Middleton urged departments simply to “start somewhere – it doesn’t matter where. Experiment; transition in small steps; go at a pace that’s comfortable to you – but you’ve got to start.” And as Middleton’s Cabinet Office colleague Dave Denton noted, there are 12,000 cloud support services on the framework – and many of these are designed to help departments “transition plan [and] understand your estate and which bits would be best to disaggregate.”

Regarding the second barrier – a lack of information about suppliers – both Middleton and Hawkins acknowledged that early iterations of the CloudStore left much to be desired. Even now, some suppliers may not have been assiduous in updating or checking their entries, said Hawkins, because they didn’t want to put too much effort into an as-yet untested route to market. This is changing, he continued, as the market matures. As well as better information from suppliers, Middleton assured the audience that a new version of CloudStore, to be released “soon”, would be more user-friendly and intuitive, making it easier for buyers to find the information they require within the catalogue.

And what of those two-year contracts? In response to an audience member at CSW’s seminar who was concerned about the cost of regularly transitioning between contracts, Middleton explained: “We’re not going to force you to change provider at the end of a [contract]; what you have to do is go back to the market place and check whether the market has moved on.”

This will help to ensure competition and transparency among providers, which will keep costs low, said Denton; and it will also enable departments to make sure they are managing their cloud services effectively by putting in place an bi-annual check that departments are not paying for more than they need. David Light, a commercial assurance manager from the environment department, said that without proper controls and checks it’s possible that departments might end up buying the same services several times over.

“Demand management is key to getting the cost savings that you’ll be looking for in your business case,” said Bird & Bird’s Jennings, but this is “is an area where the public sector has done appallingly badly in the past: I’ve seen situations where departments have unknowingly been paying for floors-full of computers. In the cloud you have even less visibility because you don’t have physical devices that you can go and see, so how do you know, when staff are leaving, that you’re closing down their password and their account and not continuing to pay for something?”

A flexible future
In fact, many CloudStore contracts could be much shorter than two years, and another potential benefit discussed at the seminar is the opportunity for departments to be much more flexible in how they buy and use services. At the environment department, for example, a project to improve information management and sharing has used the CloudStore to trial a number of systems tailored to specific business areas. The systems were delivered quickly, costing tens rather than hundreds of thousands of pounds, and can be easily scaled up or stopped depending on their success.

Middleton argued that when it comes to IT, government needs “to lower the cost of failure and the price of success; we need to be able to experiment and iterate, and I think CloudStore gives us the tools to do that.” But the tools alone aren’t enough. As Light pointed out, the “organisation [buying from CloudStore] has to adapt and say: “What do we have to do differently to get the best out of G-cloud?” So Middleton and his colleagues in the Cabinet Office can move as fast as they like in populating CloudStore with products and suppliers, but the real test of this programme will be the speed with which departments can build the new skills and processes needed to make the most of the services on offer.

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