The Government Digital Service (GDS) in the UK has managed to take huge steps in changing the way government agencies procure IT by distributing the major supplier spend more evenly amongst the SME market. A lot of this is based on ‘right sizing’ contracts to make it less appealing to buy from a single, one-stop-shop supplier and instead maintain control over a number of providers.
A growing platform
There is clearly a lot of interest from the SME community in selling to government, with the number of services offered now reaching just fewer than twenty thousand, up from 1,500 on the original G-Cloud just 3 years ago. GDS have kept it at their core to open their doors to more suppliers and create more equal opportunities between SMEs and larger providers, particularly boosted by the Government’s Cloud First and Digital by Default standards. But once you dig a little deeper, the trends don’t quite follow the aspirations.
On the switch to G-Cloud 2 in October 2012, 75% of total spend was with SMEs, a great landmark statistic, but while the number of suppliers on G-Cloud 6 is now four times what it was (mostly through new SMEs), the percentage of SME spend has dropped to 48%. It seems the more choice you have, the more you stay with what you know.
Equally worrying is the statistic that 80% of spend still comes from Central Government despite the number of customers on the platform increasing by more than ten times to over 200. When you combine this fact with the sheer number of services now available across G-Cloud to search through, it becomes less surprising that money is often flowing from the same sources to the same suppliers.
It seems the more choice you have, the more you stay with what you know.
Of all of Central Government’s spend since the platform’s launch, 50% has been with large suppliers. Clearly good news for the 50% of spend which did go to SMEs, but it’s not the ideal picture and the trend over the last 2 years doesn’t show it moving in the right direction.
Source: Crown Commercial Service data
GDS are clearly succeeding at increasing Government spend in the cloud and in growing their platform, but a large part of the ambition of G-Cloud was to make procurement more SME friendly. The reality is, though, that while there is a greater opportunity, very few suppliers are benefiting.
The real impact for SMEs
Overall, there is a positive story for SMEs, as spend has increased considerably since G-Cloud started, but it still leaves the question of whether GDS are keeping up the initial momentum that seemed so promising.
As they make the platform more supplier-centric, with pressure on providers to facilitate every aspect of discovery, decision making and administration they are in fact pushing SMEs away in favor of the greater resources of larger companies.
For instance, an initial search on the digital marketplace returns 381 services associated with one major American supplier and 368 with another. Even if an SME had the scope to provide this many services, there is no way that they could submit all of the service descriptions in time, a concern which was raised repeatedly during the Q&A for G-Cloud 6.
The Cloud Store and now the Digital Marketplace have been brilliant developments in the way that government can procure from a broader range of more evenly matched suppliers. Larger companies will always get a greater share of spend as they have the scope and experience to deliver more, but they also come with the problems that led to the creation of G-Cloud in the first place. If the aspiration of spreading IT spend amongst more suppliers is to be realized, more must be done to allow SMEs to find a stronger voice within this ever growing ocean of services.
Patrick Youngs – Marketing Manager, Aptitude Software
——Thoughts and opinions of blog post writers are their own——