News release

Date: 12th April 2010

G-Cloud Will be Undermined by Public Sector IT Buyers, According to New Report

Majority Believe G-Cloud Should Be Opt-In, Rather Than Mandatory

London, UK – 12 April 2010 – Public sector IT buyers do not want use of the proposed government G-Cloud to be mandatory, according to a new report. K2 Advisory's report "Cloud Computing – A Step-Change for IT Services," which analyses the developing market for cloud services, reveals scepticism from public sector IT buyers.

Cloud Computing is Internet-based computing, whereby shared resources, software and information are provided to computers and other devices on-demand, like a public utility. G-Cloud is the UK government cloud computing project. The report’s author, Dr Katy Ring, Director of K2 Advisory, says, “Many public sector IT buyers think G-Cloud should be offered as an opt-in sourcing method, not a mandatory one, and are sceptical on both the savings and the carbon reduction claims.”

In February 2010, K2 Advisory took a pulse check within the public sector IT buying community of Sift Media’s PublicTechnology.net. Based on 66 responses from this community it is clear that there are a number of issues emerging concerning G-Cloud:

• The majority of survey respondents (53%) do not believe that G-Cloud will deliver the anticipated billions of pounds worth of savings. However, a healthy minority (47%) thinks that G-Cloud will be successful in saving money for the provision of IT for the public sector. From this it might be surmised that there is a general belief that G-Cloud will yield cost-savings, but that the scale of those savings (as currently communicated) is not believed.

• There is also some scepticism regarding the ability of G-Cloud to impact the government’s carbon footprint: the majority of respondents (55%) think it will have a minimal impact in helping the government meet its carbon reduction commitment. But, 45% think G-Cloud will strongly help the government meet its carbon-reduction commitment. Carbon reduction is a complex issue and to date there has been far less awareness building around use of ICT than, say, use of airlines or of packaging for consumer goods. One conclusion that can be drawn from this finding is that the government needs to be far clearer about how G-Cloud will reduce its carbon footprint, if this is, as stated, one of the drivers for adopting this infrastructure. From the documents published so far it is difficult to identify the expected impact on government carbon emissions.

• The vast majority of respondents (68%) think G-Cloud should be offered as an opt-in method of sourcing IT for government, while only 32% think G-Cloud should be a mandatory way to source IT for government. Ring comments, “the problem with providing G-Cloud as an opt-in infrastructure is the sheer scale of the project which if executed on a “field of dreams - build it and they will come” scenario, will most probably fail. This is because public sector adoption rates of standardised solutions (such as public sector Flex for desktop services set up in 2007, which, three years later, has five agencies signed up) tend to be painfully slow.”

At present G-Cloud appears to be resting on a 10-year payback business case. K2 Advisory believes that without mandatory use by government bodies that payback time could well end up taking many decades.

* All K2 Advisory estimates and views are based on our work with buyers and suppliers as well as from regular surveys among Sift Media professional communities

For further information visit www.k2advisory.com

About K2 Advisory (www.k2advisory.com)
K2 Advisory applies a unique Horizon Scanning methodology, in addition to drawing on 30 years of experience advising the CIO community, in order to help organisations develop strategies for possible future market scenarios. K2 focuses on the essential areas for the future success of organisations and their IT service delivery capability, and its approach to analysis is underpinned by its links into the professional communities run by parent company, Sift Media. This provides an eco-system of professionals and senior executives including decision-making and budget-holding roles such as CFOs, Finance Directors, HR Directors and Procurement Officers. K2 Advisory is part of Sift Media, which runs the annual Business Cloud Summit in London. This year's event will be held on November 30th 2010.
For more details on the Summit go to www.businesscloud9.com.



For further information or to obtain a copy of the full report, please contact:

Dr Katy Ring, Director, K2 Advisory
Tel: +44 (0)1634 847797
katy.ring[at]k2advisory[dot]com

Vanessa Land
Devonshire Marketing
Tel: +44 (0)870 242 7469
vanessa[at]devonshiremarketing[dot]com

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