UK’s G-Cloud Marketplace Hits £1 Billion in Sales

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Total sales of cloud services to the UK government under the G-Cloud program have surpassed £1 billion (approximately $1.42 billion) with £47 million in January sales, according to statistics released by the Cabinet Office this week. Along with the benchmark sales number, the figures show that the program goal of including a wide range of suppliers, including small and medium-sized enterprises (SMEs), is being met.

By value, over half of G-Cloud sales to date were by SMEs (52 percent), and the number is even higher by volume (62 percent). Those SME numbers were up one percent each from December, as the market for UK government cloud begins to show the stability that comes with maturity. Under the program, any company with 250 or less employees, which meets certain cash flow and ownership criteria, is considered an SME. Cabinet Office minister Matt Hancock told the Sprint 16 event audience that the G-Cloud Digital Marketplace now includes over 2,400 suppliers, V3 reports.

The program was established in 2012, and had some growing pains, with poor communication blamed for low adoption in late 2013, and close to 100 services removed from its directory after being deemed irrelevant in early 2014.

A report by Eduserv in May suggested that legacy IT spending was holding back UK government cloud adoption, and 36 percent of government workers said they had never used cloud services in July, but over £240 million has been spent since then. It seems the program has turned a corner, with 24 percent of all G-Cloud spending since 2012 coming within the last 6 months.

The pace of the program’s growth has accelerated, however, with the infrequently updated G-Cloud sales dashboard showing an explosion of cloud specialist service contracts, even while SaaS, IaaS, and PaaS sales remain steady. The consistency of government spend on those categories also suggests that as cloud uses are expanded, its efficiencies, and therefore cost benefits, are being realized. The Digital Marketplace tweeted Wednesday that a recent Driver and Vehicle Standards Agency project came in 10 percent under its expected cost.

The central government accounts for over three-quarters of total G-Cloud spending, with the wider public sector accounting for the rest. If local councils and non-profits follow the central government’s lead, G-Cloud sales will continue to grow for the foreseeable future.

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