Out-Law News 1 min. read

IT suppliers matching prices offered through the cloud, says G-Cloud programme director


Suppliers are dropping their prices for Government IT outsourcing contracts to match the low prices offered by cloud suppliers, the head of the Government's 'G-Cloud' framework has said.

G-Cloud programme director Denise McDonagh, who is also the head of IT at the Home Office, said that she has seen cases of departments saving between 50% and 90% in IT outsourcing contracts by adopting cloud solutions, according to a report by Computer Weekly.

She said that the Government is currently working on a policy that will force departments to consider IT services offered through the cloud first when looking to contract with external providers. The policy will be in place later this year, according to a report by ZDNet.

However, McDonagh expressed frustration at the way non-cloud suppliers and departments have approached IT outsourcing contract renegotiations.

"I find people going to their current suppliers and saying 'I can get this from the G-Cloud for this amount of money' and the incumbent supplier says 'We will do it for the same amount'," McDonagh said at a recent event hosted by business software company Salesforce.com, according to a ZDNet report. "That makes me furious for two reasons. One, you should be moving to a different way of buying and reducing your dependency on the big Sis (systems integrators). But it makes me more furious that an SI can either deliver that service a lot cheaper than they previously said or they are taking a loss."

The G-Cloud system allows public sector bodies to gain access to services being offered by the listed suppliers during a set period. To date the Government has operated two G-Cloud supplier frameworks but is currently in the process of forming a third such framework.

The Cabinet Office has previously said that the two G-Cloud frameworks that have been in operation so far have attracted "more than 200 purchases of IT services" worth in excess of £6 million to suppliers. It said £4.6m of this figure had been spent on services offered by SMEs.

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