Supply chain · 3 December 2015

G-Cloud 7 sees more SME IT firms gain government contracts

G-Cloud 7 sees more SME IT suppliers achieve government contracts

The number of UK SME IT suppliers providing the government with cloud-based solutions has increased with the release of the latest version of the G-Cloud framework, it has been announced.

The framework’s new version, dubbed “G-Cloud 7”, is hailed as being more friendly to smaller suppliers of IT services than previous versions, with latest figures demonstrating that 11 per cent more SMEs have been awarded a place on it than on the previous version, G-Cloud 6.

According to a governmental blog post, 95 per cent of the 709 new suppliers on G-Cloud 7 are SMEs, compared with 89 per cent of the 516 new IT suppliers awarded a place on G-Cloud 6. “G7 has attracted a higher number of new suppliers than any previous iteration,” the post said.

G-Cloud 7 went live on 23 November, there are over 2,500 suppliers now signed up to the framework. Set up in 2012, the G-Cloud framework aims to move government away from signing longer-term multi-year deals with large tech companies to use the services of smaller home-grown IT firms instead.

Research director at the International Data Corporation (IDC), Massimiliano Claps, said that the framework is helping to “disrupt the habit of public sector IT buying”.

“The interesting thing is that SMEs represent over 50 per cent of G-cloud deal value,” he said.

“That isn’t because they capture big deals, but because the average deal size of G-Cloud contracts is well below £50,000. It’s affordable to bid on and deliver for SMEs and has lower risks in terms of financial, operational and technical lock-in for the government buyer.”

Despite the high level of uptake, a 20 per cent limit on the amount by which suppliers can scale up their services has disgruntled some, and research carried out by IT news website CRN found two-thirds of suppliers listed on G-Cloud failed to make any profit.

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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