The document discusses the tension between value and commoditization in government cloud computing contracts through the G-Cloud framework. It notes the government's goals of increasing commodity solutions through the CloudStore marketplace while also supporting small businesses. However, many public sector customers still prefer relationships and customized solutions over standalone components. The author argues that suppliers need to understand customer needs to provide value-added solutions through cooperation and trust between large firms and SMEs. While CloudStore transactions are growing exponentially, overall spending through the framework remains low compared to total IT budgets. To be successful, the model needs to blend standardized commodity offerings with opportunities for specialized expertise and codevelopment between partners.

1. G Cloud Uk Meetup
Ivan Harris, Eduserv - G-Cloud: The Value-Commodity
Paradox?

2. G-Cloud:
The Value-Commodity Paradox?
G-Cloud Meet Up, London
Ivan Harris, Business Manager - Cloud Services
2nd October 2013

3. IT for public good
Commercial in Confidence
Copyright Eduserv 2013
All Rights Reserved
Value vs. Commodity
Co-created
Value
Solution
Offer
Component
Commoditisation
Value
G-Cloud
Needs
• More commodity solutions
• Flexibility and freedom
• Ready and easy to use
• Low cost
• Competitive marketplace
• 50% cloud-based services /
50% SMEs supply target
G-Cloud Strategy
• 36%: SME scale and capacity
• 29%: Nervous about working
with new suppliers
• 32%: Difficult to split services
into the CloudStore
constituents
• 24%: Lack of trust and
relationships with suppliers
Eduserv Civil Servant Survey

4. IT for public good
Commercial in Confidence
Copyright Eduserv 2013
All Rights Reserved
It’s a Matter of Trust!
• Purchasers need the trusted advice
of expert suppliers to create value-
added solutions
• Suppliers need to understand the
purchaser’s business drivers and
requirements
• Business trust is built on:
– Shared values
– Predictability
– Success
– Mutual benefit
• Trust requires relationship building
• Agile delivery requires trust
• There’s no need to sacrifice value!
• A success story…
Co-created
Value
Solution
Offer
Component
Co-created
Value
Solution
Offer
Component
Plan A Plan B
$$$

5. IT for public good
Commercial in Confidence
Copyright Eduserv 2013
All Rights Reserved
CloudStore and SME Spending Trends
Lot Mar 2013 Aug 2013
1 (IaaS) 0.6 (3.4%) 1.3 (3.5%)
2 (Paas) 0.3 (1.6%) 0.4 (1.1%)
3 (SaaS) 5.1 (28.0%) 7.8 (20.7%)
4 (Svcs) 12.2 (67.0%) 28.0 (74.7%)
Total Value 18.2 37.5
Transactions Mar 2013 Aug 2013
Transactions 909 2080 (+129%)
Average Value £20.2K £18K (-11%)
Num Customers 159 227 (+43%)
Num Suppliers 108 151 (+40%)G-Cloud III
May 2013
G-Cloud I
Feb 2012
G-Cloud II
Oct 2012
G-Cloud 4
Nov 2013?
• By 2015, 50% of new central government IT spend to be on cloud-based services and 50% to SMEs
• Overall government SME spend has increased from 6.5% in 2009/10 to 10.5% in 2012/13
• £11.3Bn public sector SITS market, £10.4Bn to top 20 providers
• 2011/12 to 2012/13 SME spend increase: Direct £4.4Bn to £4.5Bn, Indirect £2.9Bn to £4.0Bn
• £11.3M of CloudStore spend in year 1 versus £6.5Bn of Central Government spend (~0.2%)
• Data shows exponential growth in CloudStore purchases

6. IT for public good
Commercial in Confidence
Copyright Eduserv 2013
All Rights Reserved
Summary
• CloudStore and SME spend are
trending in the right direction
• Combine the ease of use and
cost savings of CloudStore with
relationships
• Blend large SIs with SMEs for
expertise, innovation and cost
savings
• Continue to advocate large
SI/SME coopertition
• Find SMEs who can deliver co-
created value directly
ValueTrustCommodity

7. Thank you!
Ivan Harris
ivan.harris@eduserv.org.uk
(07925) 224284