Doom-mongers have been having a field day with the revelation that a paltry £2.7m worth of cloud-based software and IT services has passed through the UK Government’s much-heralded CloudStore.
CloudStore, which serves an online catalogue of approved cloud services suppliers to public sector agencies, opened in February 2012 at an estimated cost of £4.9m, with the aim of accounting for 50% of government IT spending by 2015.
This 50% target looks a long, long way away. PAC expects UK government spending to hit around £16bn in three years time – even accounting for the cannibalizing effects of increasing cloud adoption.
But PAC’s view is that the government’s move towards cloud services should be viewed as a marathon, not a sprint. The Government has not done itself any favours by setting such unrealistic targets for CloudStore, and it’s going to be an evolution rather than a revolution.
Many agencies have complex systems requirements that simply cannot be shifted to cloud delivery models in the short term, as cloud-based alternatives do not deliver the required functionality. Secondly, many are tied up in multi-year licensing, outsourcing or framework agreements that cannot be switched off overnight without incurring penalties.
So CloudStore clearly has its challenges. Several government agencies at this week’s Business Cloud event in London said that they found it difficult to differentiate between suppliers on CloudStore, and that pricing comparisons can be misleading.
Apples-with-apples comparisons can be tricky. For example, some vendors include additional service costs such as support, backup and monitoring as part of their offering, others don’t. One IT buyer from the Home Office said that his team had drawn up a spreadsheet of additional questions that they ask CloudStore suppliers to fill out in order to get a more complete view of their proposition.
Meanwhile, some procurement teams at government agencies have lingering concerns about the legality of buying services through CloudStore in terms of data security and protection. And some buyers use CloudStore as a starting point to understand the supplier community before going out and negotiating directly with the vendors off their own bats.
Another feature that agencies would like to see incorporated is a buyer rating of CloudStore similar to the five-star user reviews on eBay or Amazon. The vendors have already gone through a fairly tough qualification process to get onto CloudStore in the first place to check their security and performance credentials. But buyers also want to know the experience of their peers in terms of how easy or difficult particular suppliers are to work with.
In many ways, CloudStore should not be judged on its share of public sector IT spend. The main aim of CloudStore is to save the government money, and it can be argued that for every £1m spent via CloudStore, it saves somewhere between £2m to £10m versus traditional service and licensing models.
The third iteration of CloudStore is in development, and there is clearly growing interest from agencies. For example, large parts of the NHS may use CloudStore suppliers for secure e-mail services when an existing deal with Microsoft Exchange expires in 2013.
The market is some way from a tipping point, but with budget pressure biting and cloud being mandated in many government departments, CloudStore will be an increasingly attractive option.
It won’t hit its target in 2015, but with some fine-tuning, CloudStore can still take a big chunk out of government’s IT costs.