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Friday, August 22, 2014

Sourcing IT on the Cloud Takes Hold in the U.K.

The U.K. is considering a bold experiment in procurement: prioritization of cloud-based IT purchases by the central government.

The measure is, predictably, intended to save money. The U.K. public sector annually spends £16 billion ($25 billion) on IT purchases, according to a report in InformationWeek. Purchasing IT services from the government cloud, or G-Cloud, rather than large suppliers, could yield significant savings — as much as two-thirds in some cases.

The G-Cloud purchase platform has a good chance of wide-scale adoption since the national government is implementing it where practical, and its acceptance is being promoted throughout the public sector.

Credit: ddpavumba at

Credit: ddpavumba at

G-Cloud sourcing is usually free of contracts that promote close and costly long-term relationships with suppliers. Most vendors listed on G-Cloud are small to medium businesses, which gives government a chance to broaden its supply base, increase competitiveness, and support enterprise initiatives throughout the country.

InformationWeek reports that there are more than 700 suppliers and 5,000 services in the digital CloudStore catalog, which lists the services and products available for purchase, and has been online for a year.

The government now spends only £18 million ($28 million) on CloudStore purchases, but the objective is to grow this figure as users become familiar with the platform.

If it is successful in government procurement, the G-Cloud could serve as a model for companies within the private sector, providing a new and more efficient way of sourcing products and services while reducing expenditures.

Versions of this concept have been in place for some time, of course, generally as buying coops by businesses and, in the case of NASPO (National Association of State Procurement Officials) in the U.S., state governments. Acceptance by a wider group of government and private-sector businesses could have a ripple effect of economic benefits for vendors and users alike.

Stay tuned.


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