Providers ambivalent as CCS and GDS head into a crucial period – one that will bring a potential £1.5bn opportunity, but lots of uncertainty too

Credit: Flickr/Dennis Hill

As the ninth iteration of the G-Cloud framework heads towards an unprecedented year-long extension, suppliers are preparing for a fruitful year, but remain nervous about what lies beyond that.

Last week Crown Commercial Service announced that G-Cloud 9 will be extended beyond its initial year-long term for a period of up 12 months. This takes its potential end date to 21 May 2019. 

G-Cloud is one of five purchasing vehicles that form part of CCS’s Digital Future portfolio, alongside Crown Hosting Services and Digital Outcomes and Specialists 2, both of which also sell through the government’s Digital Marketplace. Two other frameworks – Cyber Security Services 2, and Quality Assurance and Testing for IT Systems – are also contained within the Digital Future unit at CCS. 

In addition to the G-Cloud 9 extension, two other deals are to be stretched out for a further year, with both Cyber Security Services 2 and Digital Outcomes and Specialists 2 entering an additional 12-month term early in 2018.

Both the sixth and seventh iterations of G-Cloud ran for 18 months, to allow the government longer to work on improvements for G-Cloud 8. But, since the first G-Cloud framework was launched in 2012, the framework has never gone longer than 10 months without a new and expanded version being launched. 

“Previously, we have undertaken continuous and regular refreshes… this hasn’t always given us adequate time for the Digital Marketplace to be developed beyond simply the refresh of these agreements”
CCS

If G-Cloud 10, or an equivalent deal, does not launch until its predecessor comes to an end, then there will have been a period of two years without a new iteration – a timeframe more typical of the hulking hardware frameworks G-Cloud was intended to offer an alternative to.

This focus on frequent reiteration has, unlike those longer-term deals, allowed new suppliers regular opportunities to bid for a spot on the framework, and for incumbent providers to add new services, or update specifications or pricing for existing offerings. 

The initial G-Cloud in 2012 offered 1,700 services from 258 suppliers. G-Cloud 9 includes more than 19,000 services and no fewer than 2,847 companies – meaning that both figures have grown more than tenfold in the last five years.

The extensions to three of its five Digital Future deals come as CCS is working with GDS to build the Crown Marketplace – an Amazon-style online store which aims to offer public-sector customers a platform through which to buy a comprehensive range of goods and services. It is expected that the Crown Marketplace, which is about 18 months away from launch, will ultimately subsume and replace the Digital Marketplace.

“Previously, we have undertaken continuous and regular refreshes for each of the [three] individual agreements,” CCS says. “However, this hasn’t always given us adequate time for the Digital Marketplace to be developed beyond simply the refresh of these agreements, to meet identified user needs. More time is now needed to transform the platform and make it scalable and more flexible, enabling more framework services and improved customer and supplier functionality based on what user needs have identified.”

Even if it is in need of some development, the Digital Marketplace is set to play host to a large and growing amount of business in the coming months. Currently, the five frameworks that comprise the Digital Future portfolio – the biggest three of which operate through the Digital Marketplace – conduct about £1bn in sales each year. 

Within the next 18 months, CCS plans to more than double this to £2.5bn.

A very good year
Chris Farthing, managing director of Advice Cloud – a company which features on Digital Marketplace and also helps other SME suppliers get onto and sell through the framework – tells PublicTechnology that “there is an opportunity for suppliers that are currently on there to have a really, really good year”.

“CCS must have some pretty ambitious plans to talk to the wider public sector,” he adds. “It is exciting for anyone that is already on there – we should all be making the most of G-Cloud.”

The news of the extension might provide a prompt for those suppliers yet to make the most of their G-Cloud berth, Farthing adds.

G-Cloud launch dates

G Cloud – February 2012
G Cloud II – October 2012
G-Cloud III – May 2013
G-Cloud 4 – October 2013
G-Cloud 5 – May 2014
G Cloud 6 – February 2015 
G Cloud 7 – November 2015
G Cloud 8 – July 2016 
G Cloud 9 – May 2017
G Cloud 10 – ???

“70% of the suppliers on there are not trading,” he says. “They can now look at their submission and update their service design – this would allow their services to be better understood. A lot of suppliers talk about their own solution and all the benefits – there is nothing about the problem they can solve. And the pricing is often opaque, at best.”

But the extra year also presents challenges for both G-Cloud suppliers and CCS, Farthing says. One of the most pressing is an imminent price hike of 10% to 15% on certain Microsoft products, which is due to take effect in January. A further such increase has already been scheduled by the software vendor for January 2019.

Farthing explains that the extension to G-Cloud means that any resellers offering certain Microsoft products will be denied chances to update their pricing, meaning that their profit margins could be eroded or even obliterated entirely – especially if a replacement is not in place by the time of the second price increase in January 2019.

“I really, really hope that, at the end of this, there is something that continues to be iterative. But the question is: what confidence do I have in GDS and CCS?”
Jan Joubert, Rainmaker

The Advice Cloud boss says that “anything that CCS can do – any flexibility” will be welcomed by SME suppliers feeling the pinch of increased costs.

Jan Joubert, chief executive of Rainmaker Solutions, says that G-Cloud 9 “is a very successful route to market for us”, and that its extension is – superficially – good news for his company. 

“But what was in place before G-Cloud locked out companies like Rainmaker; my concern is what is it going to look like in 12 months’ time,” he says.  “We were very involved in the design of the original G-Cloud framework, which allowed a wide range of suppliers to trade with government, and was refreshed on a regular basis.”

By potentially running for close to two years without renewal, G-Cloud will be in danger of “missing the next wave of innovation – and that does not feel like a good thing”, Joubert says. 

For the Rainmaker chief, the jury is still out on whether the leadership of the organisations that are designing the next generation of frameworks and marketplaces will remain committed to innovating.

“I really, really hope that, at the end of this, there is something that continues to be iterative,” he says. “But [the question is] what confidence do I have in GDS and CCS, that they will retain the initial intent [of G-Cloud]? The playbook that GDS has designed is excellent, but [the organisation] seems to look quite corporate these days.”

Desired improvements
Jamie Clifton, vice president of product management and solutions at G-Cloud supplier BridgeHead Software, was more upbeat about the news of the extension, which he says could allow for important enhancements to be made.

“We are big supporters of the G-Cloud framework and, on the whole, it’s good news for suppliers that the current iteration has been extended,” he says. “This is also pertinent for our healthcare customers, who I am sure will support a delay – in return for an improved framework.” 

The main improvement Clifton would like to see would be the introduction of measures to promote G-Cloud’s use across the NHS – which has endemic challenges in terms of cloud adoption, he says.

Launch and maximum value of CCS Digital Future portfolio

• Crown Hosting Services – May 2015, £700m
• Digital Outcomes and Specialists 2 – January 2017, £345m
• Cyber Security Services 2 –  February  2017, £110m
• Quality Assurance and Testing for IT Systems – March 2017, £110m
• G-Cloud 9 – May 2017, £600m

“It’s been well documented that the NHS has been slow to make the most of the opportunities provided by G-Cloud in all aspects except infrastructure services,” Clifton says. “Trusts have aligned the move to cloud solutions to their wider digital-transformation plans and, whilst this top-down, strategic, approach to cloud procurement has made sense from an infrastructure point of view, it hasn’t made the procurement of SaaS solutions on a department-by-department basis very easy.” 

He adds: “At this lower level, healthcare customers have suffered both from a lack of centralised certification of software solutions by NHS Digital and the resources or time to carry out the necessary certification checks themselves. This is creating inertia that we would like to see addressed within the next iteration of G-Cloud, when it goes live.”

Farthing of Advice Cloud, meanwhile, would like to see greater use of analytics, in a manner that allows suppliers to better serve the needs of public-sector buyers.

“We would like better analytics, to help suppliers understand the buyer journey and, where suppliers have been successful in call-off contracts, what are the reasons for that – so people get an opportunity to improve that submissions and their services,” he says.

Anyone who has been hoping that the government would find an opportunity to improve how it buys cloud technology will, at least, be heartened to know that it has a more time on its hands than ever before in which to do so.