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SMEs are outmaneuvering IT giants on G-Cloud

A business-to-government (B2G) business development agency has claimed that the G-Cloud (opens in new tab) procurement framework truly embodies the government’s SME strategy.

According to DeNove (opens in new tab), the number of sales via the framework that are awarded to smaller businesses represents that Whitehall remains committed to doing 25 per cent of all business with SMEs by this year.

The firm recently examined the £40 million of services bought through G-Cloud every month to analyse just how many contracts small and medium companies are winning through the framework.

It applauds G-Cloud for its transparency because all sales data is made publicly available, allowing DeNove to see that incumbent large ICT suppliers are “drastically” failing to replicate their traditional market dominance on the framework.

Traditionally, the technology suppliers which have dominated the government market are HP (opens in new tab), Capgemini (opens in new tab), Capita (opens in new tab), BT (opens in new tab), Fujitsu (opens in new tab), Atos (opens in new tab), IBM (opens in new tab) and Serco (opens in new tab).

However, of these suppliers, just IBM has made it onto the top ten G-Cloud suppliers list, coming in at number four after £17.5 million in revenues from the framework.

The top ten suppliers on the G-Cloud procurement framework are:

1. BJSS LTD (opens in new tab) (£25.8 million)

2. Valtech Ltd (opens in new tab) (£24.6 million)

3. Methods Advisory Ltd (opens in new tab) (£21.9 million)

4. IBM United Kingdom Ltd (opens in new tab) (£17.5 million)

5. Equal Experts (opens in new tab) (£17.4 million)

6. Mastek UK Ltd (opens in new tab) (£16.8 million)

7. PA Consulting Services Ltd (opens in new tab) (£15.3 million)

8. Skyscape Cloud Services Ltd (opens in new tab) (£14 million)

9. Kainos Software Ltd (opens in new tab) (£13.9 million)

10. Thoughtworks Ltd (opens in new tab) (£10.7 m).

Large Firms Market Share “Won’t Disappear Overnight”

According to DeNove (opens in new tab), its research indicates that new suppliers are enjoying greater market reach on the cloud framework but this does not mean that larger ICT suppliers are not trying to get noticed on G-Cloud.

“This lack of success on the G-Cloud is not for lack of trying as can be seen by the number of G-Cloud service lines that they have listed on the Digital Marketplace (opens in new tab),” the report claims.

It adds that the lack of G-Cloud success for larger suppliers also doesn’t necessarily mean that larger suppliers are being phased out of government – instead, it could just be because these firms are focusing on other public sector frameworks instead.

DeNove also acknowledges that organisations such as Serco and Capita actually derive the majority of their revenues from governments from other types of services, not just technology-based ones.

The agency claims that their research indicates there are a few important lessons for G-Cloud suppliers to learn.

It believes that all companies, big or small, need to commit to faster innovation cycles, better pricing and improved and adapted sales and marketing techniques that reflect the fact that this is an entirely new channel that demands its own tools and skills.