Kate's Comment

Thoughts on British ICT, energy & environment, cloud computing and security from Memset's MD

G-Cloud: The dream is dying

I got involved in G-Cloud back in late 2009 as their technical architecture co-lead on Phase II of the project. They were exciting, heady times – we had a dream of punching through through archaic government procurement requirements with an online “App Store” and use the unleashed the power of highly-commoditised Cloud services to both improve the quality and reduce the cost of government IT.

I have been a vocal supporter ever since, even in the face of depressingly slow progress, but today I have finally had enough. The dream is dying.

In the spirit of full disclosure I shall explain why I have become so disenchanted. Over the last few years we, a relatively tiny business turning over less than £10m/year, have made massive investments in pursuit of government business via the G-Cloud Framework:

  • £2m on a high-security data centre, originally specced out to IL4 in preparation for “data aggregation” – a subsequently abandoned requirement.
  • £300k + £200k/year enhancing and upgrading our security and compliance stance for IL3, again a requirement subsequently relaxed.
  • £250k + £120k/year on a PSN-Protected connection, which has only just started working and nobody seems to actually use.

These investments, while affordable, have stolen investment from other areas of our business. Our growth over the last few years has slowed as a result. Our faith in the G-Cloud dream has caused us to innovate less and create fewer jobs.

At the same time, we are seeing an utterly pitiful return via G-Cloud – about £100k/year. We do have a fair bit of other government business now, but not via G-Cloud and still only 6% of our revenue overall. Nowhere near enough to make it a profitable venture.

Perhaps the most galling fact of all is that we have had no new business from G-Cloud since 2013! With the eighth iteration of the framework due next week we’re actually asking ourselves whether it is worth it at all.

What are we doing wrong?

I have been asking myself this a lot. First off, we currently go far and beyond the now-reduced compliance and security standards, so it can’t be that.

The G-Cloud buying guide makes it clear that cost is supposed to be the main choice point. We have worked hard to keep our prices as low as possible; our specialty is using open source software and generic hardware to provide high-security, low-cost IaaS. Fundamentally it is just VMs and storage with some bells and whistles around the edge. We are definitely cheaper than our competitors and have outstanding track records, so it can’t be that.

As Paolo Vecchi asked, “Maybe IaaS is too complicated for middle management?“. If that were true our competitors, most notably Skyscape, would not be powering ahead with stunning revenue growth. They are primarily offering VMware/EMC stacks which makes lifting-and-shifting legacy estates – most of which is VMware/EMC – easier, but that still doesn’t account for the enormous difference. It can’t just be that though because Amazon Web Services – a different closed standards platform – have also been making inroads into G-Cloud in the last year.

What about our sales approach? This, I think, is the nub. We don’t really do pro-active selling, just lead conversion. We are a technically-oriented, cost-focussed Cloud/hosting business. We don’t have padding in our prices to afford armies of salespeople running around, nor deep-pocketed backers willing to allow us to make losses. We briefly tried hiring some “traditional” salespeople, but their tactics were incompatible with our high integrity and our technical, introverted culture was at odds with their own. More to the point, a big part of the point of G-Cloud was to get away from an onerous, expensive sales/procurement process with buyers able to self-service with minimal interaction – because we’re all basically selling the same stuff!

We have had some success by going to market with partners (mostly the business not through G-Cloud). They want the kudos of working with a techie SME as well as access to our open source and cloud know-how. Until recently we continued to believe the Cabinet Office propaganda that a significant proportion of government was ready to disaggregate the stack and directly consume IaaS. We were naïve to do so, and our partners help fill the skills/expertise gap in government IT.

Depressingly, I have to agree with Andre Beukes’s suggestion that, “…in Gov it’s who you know not what you sell that’s the difference.” Skyscape have a lot of ex-civil servants on the payroll, and kudos to them for recognising the reality. It does almost bring me to tears though; the whole point of G-Cloud was to break away from the hideousness of old boys’ networks and closed procurement systems. So what has gone wrong?

What is wrong with G-Cloud / Digital Marketplace?

It does require buyers to change their behaviour in order for the new model to work.  They haven’t, and hence it doesn’t.  Without wishing to “put all the blame” onto the customer, this is probably the biggest factor in the failure of the G-Cloud dream.

The Digital Marketplace is also broken. Most buyers only go there once they have already worked out what they want to buy and from whom – perhaps in part because it is so hard to actually find what you’re looking for!

The 2010 Phase 2 vision was of a marketplace (we called it the “App Store” then) with the following key features that are still missing:

  • Ability to compare prices like-with-like: This should be completely possible for VMs and many other commoditised services!
  • An eBay-like buyer and seller public feedback system

Instead we have a marketplace where you only get noticed by “spamming” by including the right keywords in your text and getting partners to re-post your services to get multiple listings of the same thing. It is like the bad old days of search engine SEO! At the very least the entries’ order should be randomised.

The second big problem is that central government completely ignore their own mandates. Cloud First mandate? LOL! Only 20% of G-Cloud spend last year was IaaS/PaaS/SaaS. Open Standards mandate? This one isn’t even funny. We’ve been running OpenStack services for government for over a year and entered them in G-Cloud 7 (last November). OpenStack – in case you’ve been living under a rock – is the de-facto Open Standards, Open Source IaaS solution; the only thing that can possibly hope to stand against the might of AWS’s IaaS and Azure’s PaaS in the long term. We are one of only a handful of suppliers offering it on G-Cloud at present, but still no interest.

Finally, until recently the Buyer’s Guide mandated that the once the buyer had made their selection from their shortlist they were to give some minimal feedback to those on their shortlist who were unsuccessful. We never actually got any feedback, which is bizarre given that at the time it was at-best a three-horse race with our competitors (back to “who you know” and “deciding before going to G-Cloud”). Reinstating the requirement for feedback and enforcing it would be very helpful to the supplier community. How can we learn and improve if we just get stonewalled?

The dream is dying

I bear full responsibility for Memset’s government journey to date. Not only did I have a hand in creating the coolaid but I made us drink it. We passionately believed in the dream of G-Cloud and kept doing so despite the goal posts being repeatedly moved, the marketplace continuing not to function properly and buyers continuing to behave in the same old ways.

We have learned a lot along the way and, thanks to our enhanced security posture, are attracting unexpected business from sectors such as finance and healthcare as well as government business through other routes. Having poured so much of myself into G-Cloud though this is small comfort.

We’re not turning our back on government. We’ll still be here, helping those enlightened few among the public sector to save money with high-efficiency, high-security Open Standards IaaS/PaaS, but it will be on our terms. I’m tired of chasing a vision that nobody else seems to be committed to.

I have dreamed a dream, but now that dream is gone from me. :'(

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