G-Cloud to cut government spending

Public sector cloud computing is beginning to catch on, but there is still a job to be done in winning sceptical hearts and minds, as John Lamb discovers


Hailed recently by a top White House official as a global model for buying digital services, G-Cloud, the UK public sector’s cloud programme, is beginning to gather momentum.

After bobbing along for nearly two years, sales through the new marketplace recorded a £50-million uptick recently, raising hopes that government targets for savings will be achieved.

The rationale for G-Cloud is simple: much of the IT the public sector runs could be supplied more cheaply and flexibly through the cloud, enabling organisations to mothball expensive data centres.

Instead of negotiating lengthy contracts for items such as computer storage, servers and software, it makes financial sense to buy them online as a utility service, which can be switched on and off as required.

The potential savings are immense. The government expects G-Cloud to cut £200 million from central government budgets alone and is confident that 50 per cent of new public sector IT spending will be generated by G-Cloud by 2015.

Savings on individual projects can run to 25 per cent or more. One unnamed government department says it reduced its £750,000 hosting bill to £250,000 through G-Cloud.

Public sector IT could be supplied more cheaply and flexibly through the cloud, enabling organisations to mothball expensive data centres

“G-Cloud has the potential to reach an estimated 30,000 buyers across the public sector,” enthuses Tony Singleton, programme director for G-Cloud. “Of course, any transformational change of the scale that G-Cloud can deliver may be scary.”

The effort to switch from traditional IT to off-the-peg, web-based cloud services has proved slow going. Earlier this year, total takings on the CloudStore marketplace, over the two years since it was set up, amounted to £124 million, compared with a total public sector IT bill of some £14 billion.

At the last count there were more than 13,000 services available from some 1,200 suppliers. The services, which have to be approved via framework agreements, have fixed prices and in theory should be much easier to buy than old-style IT.

However, local authorities have not been as impressed as their central government counterparts, accounting for only 25 per cent of sales.

One reason is that councils, police and fire services are not subject to so-called Cloud First rules under which central government departments spending more than £100,000 on a project have to get clearance from the Cabinet Office before they can proceed.

A surprising number of organisations do not know about G-Cloud. Research carried out by the Six Degrees Group shows that most local authorities have not even heard of it. Another study by iGov claims nearly 50 per cent of local public sector bodies have no plans to use G-Cloud.

Officials acknowledge that CloudStore, now in its fifth iteration, could be better publicised and easier to use. Work is going into making it more user-friendly and to overcome objections from uneasy civil servants.

From the outset G-Cloud was intended as a way to break the hold of “an oligopoly” of large system integration companies by letting in smaller, innovative suppliers. In that it has succeeded as more than 50 per cent of sales through CloudStore have been by small and medium-sized enterprises.

Now G-Cloud needs to prove it can attract a larger number of customers.