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By | Paul Kunert and Gavin Clarke 16th August 2012 10:18

Cabinet Office faces SME supplier backlash over Cloud Store

But Maude's mouthpiece says it is breaking monopoly of integration giants

The Cabinet Office reckons three-quarters of the contracts dished out on public sector IT services catalogue Cloud Store have gone to SMEs.

The claim was made in response to feedback given to The Channel from some suppliers who suspect G-Cloud biz is dominated by the same integrators that monopolised wider public sector IT procurement.

A Cabinet Office spokesman said: "Around 75 per cent of the 260 suppliers on the G-Cloud framework are SMEs and 75 per cent of the contracts let to date have gone to SMEs".

Clearly in self-licking mode, the Cabinet Office described this as "impressive progress" in the circa six months since the online IT services catalogue Cloud Store went live.

"The G-Cloud framework is still new and we are keen to work with SMEs as it develops - we want to hear their views on how we can continue to ensure a level playing field," the Cabinet mouthpiece added.

The only available breakdown of sales on Cloud Store from April to the end of July can be found here, stating that a total of £1.27m has been spent with suppliers.

Small and medium-sized firms on the G-Cloud framework can vent various concerns or ask administrators questions via the Mystery Shopper supplier feedback service but this is not open to public viewing.

The Cabinet spinner said it has received 238 cases "of which 193 have been closed with 81 per cent of them resulting in a positive outcome".

"The majority of cases received so far relate to wider public sector procurement," he added.

One noteworthy point though is the declining numbers of interested applicants for G-Cloud 2 which launched in May, and is expected to yield larger and longer term contracts.

Just 376 IT services firms expressed an interest in signing up for G-Cloud 2 compared to the 600 that applied for the first iteration.

Tim Foxlow, veep at medium-sized managed services provider Attenda – a £32m turnover business in 2011 that employs 270 staff – voiced disappointment at the sales it has managed to capture via G-Cloud.

"Any SME you talk to will say the same thing: it's not working," he claimed, adding that the business had not won a single contract since the launch of Cloud Store.

"People buy from people, and the departments awarding contracts have been buying from tier ones: they have an [existing] relationship and its an easy route," he told The Channel.

Attenda is included in G-Cloud 2, but Foxlow said "we won't stick with it for long unless it delivers results".

Martino Corbelli, chief customer officer with hosted email and unified communications provider Star, agreed G-Cloud produced a "hell of a lot of media noise and hot air" but initial hope and excitement hasn't produced a single order or enquiry.

He blames a government procurement culture that defaults to doing business with existing suppliers. Star, a Microsoft partner with 240 employees, lists customers in retail, tech, manufacturing and media but none in government – despite getting on G-Cloud version 1.

"From my perspective, G-Cloud is nothing more than a suppliers' website. How are you going to change decades of procurement practices with just a suppliers' website?

"You live in hope that something might hopefully change ... but making an announcement and expecting the flood gates to suddenly open, I can't see that happening. It is very, very unlikely."

Corbelli added that if the coalition is committed to driving more business through SMEs, "they need to have a significant rethink and consider how they change the procurement process in government for medium-sized companies".

David McLeman, boss at Google Apps Premier Enterprise Reseller Ancoris, said it has won just one contract under Cloud Store - which doesn't seem to appear in the Cabinet Office sales list - but he appeared more sanguine.

"Until the G-Cloud process has been baked we are not expecting to get huge amounts from it. It's still early days for cloud in the public sector, in the commercial space its starting to hit the mainstream," he said.

More cloud reference sites are required with Hillingdon Borough Council and Warwickshire County Council the first two public sector organisations to migrate to email-as-a-service, he said.

"Lots of organisations are keen to be second but very few want to be first," said McLeman. ®

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