UK puts £14B cloud framework in place with SMEs promised a bigger slice

The British government has awarded places on its latest G-Cloud procurement framework, through which the public sector could spend an estimated £14 billion ($18.9 billion) over four years. Whitehall hopes smaller UK suppliers will capture more of that business than they have in the past. G-Cloud 15 is billed as the most significant upgrade to the UK's public sector cloud procurement framework since its inception over a decade ago. It was signposted by the Crown Commercial Service last year, when it opened up a tender for providers to take part, as reported by The Register at the time. Approximately 90 percent of the suppliers awarded places are small and medium-sized enterprises (SMEs), although a place on the framework does not guarantee any business. G-Cloud 15 is overseen by the Government Commercial Agency (GCA), formed in April by combining Crown Commercial Service with commercial teams from the Cabinet Office. It folds three separate frameworks (Cloud Compute 2 and Lots 1-3 and 4 of G-Cloud 14) into a single commercial agreement. The aim is to give public sector buyers a simpler route to cloud hosting, software, and support through one marketplace. According to the GCA, £14 billion is the framework's estimated value over four years rather than committed expenditure. Approximately £3 billion ($4 billion) in public sector cloud spending is expected to pass through it annually. Call-off contracts can run up to a maximum of 60 months, giving suppliers greater commercial certainty and buyers longer-term partnerships, it claims. The government also wants smaller, local players to win more work. Amazon Web Services and Microsoft Azure currently account for roughly 80 percent of the UK's cloud infrastructure services market, according to some estimates. The new framework introduces measures designed to lower barriers and expand opportunity for smaller suppliers. The GCA claims its modernized classification system will help suppliers, particularly smaller firms without dedicated bid teams, describe their services accurately and appear in relevant searches. "G-Cloud 15 is a genuine step forward for small and medium-sized businesses wanting to work with the government. For too long, SMEs have faced barriers that hold them back from winning business – complex application processes, short framework windows, and procurement routes that favour incumbents," stated Philip Orumwense, GCA commercial director and chief procurement officer for technology. Omdia chief analyst Roy Illsley told The Register that the framework appeared to be part of a UK effort to develop sovereign cloud capacity. "What would be interesting is to understand what conditions they are placing on this," he said. "For example, in the EU, CADA (proposed Cloud and AI Development Act) currently has 4 levels, where L1-3 is open to the likes of AWS, Google, etc, but L4 is for EU only infra and software, so fully EU clouds. Once this has been agreed, all EU public sector orgs will need to classify the workloads against these levels and only select clouds that match." Illsley expressed skepticism over whether the government's "SME agenda" will really work, though. "The Big Three control most of UK government, education, and healthcare cloud, so is that going to change? Well, it needs to, but do we have the capacity and technology to deliver it? Let's see if it is just another good-sounding initiative that gets steamrollered by the large hyperscalers," he said. Reg readers may recall that local cloud operator UKCloud and its parent, Virtual Infrastructure Group, were forced into liquidation back in 2022, blaming the dominance of global vendors. Its demise caused "real business continuity issues" in several government departments. Jake Madders, co-Founder and director at Hyve Managed Hosting, commented that the 90 percent SME target is "unrealistic if the government continues to make it harder for smaller providers to get through the door," adding: "In our experience, the G-Cloud 15 process felt like complete chaos." Madders added: "Guidance was incomplete at publication, key requirements, including ISO certifications, changed without notice, and we faced unrealistic deadlines to meet them. There is no appeal mechanism, and the government provides no explanation of how to improve the application – the decision is final. He said: "If the government is serious about increasing competition, it needs to ensure smaller suppliers get a clear, stable process with genuine feedback. Otherwise, the 90 percent figure risks becoming nothing more than a headline number. "Ultimately, success should be judged not by how many SMEs are on the list, but by how much of that £14 billion actually reaches them. Real sovereignty requires governance that supports genuine competition, not just access." G-Cloud 15 is scheduled to open for public sector purchases on September 17. G-Cloud 14 will remain operational until it expires on October 28, and any new call-off contracts using the old framework must be awarded by then. Existing call-offs can continue beyond the framework's expiry. ®

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