Tech companies to carry cost of State’s cancelled cloud plan

Technology companies, rather than taxpayers, ended up carrying the cost of the decision to cancel a major cloud computing plan for the public sector, as revealed in The Irish Times last Friday.

The Government Cloud Services Catalogue (GCSC) project would have seen the creation of a list from which public sector bodies could have chosen prevetted technology suppliers and price rates for a variety of cloud computing services under 35 categories. It was intended to simplify a potentially complicated procurement process and lower the cost of IT technology services to the public sector.

Some of the biggest technology providers in the country bid to take part in the multisupplier framework project. Microsoft and Eircom confirmed they had taken part in the prequalification process, as did indigenous IT firms such as Baker Security & Networks and iSite Solutions.

Some companies had bid teams working for weeks on the project. Many collaborated with each other to meet the requirements for hosting data in the cloud and direct connections to Government networks.

Other industry sources said the application process grew in complexity since the GCSC concept was first announced two years ago, and the proposal was revised multiple times before the final request for tenders was issued in June 2014.

Even though the Department of Public Expenditure and Reform launched a revised public service ICT strategy in January, the announcement on March 16th that the GCSC project was being abandoned caught many by surprise.

"It is disappointing for a number of companies that the cloud services catalogue was cancelled, given the significant time and effort invested," said Paul Sweetman, director of the technology industry's representative group, ICT Ireland.

Lucrative

Had the project gone ahead, it could have been lucrative for technology companies, particularly small firms that traditionally struggled to sell to the public sector. The latest figures for the UK’s G-Cloud, on which the Irish version was partly modelled, show 49 per cent of sales by value went to SMEs. Total G-Cloud sales exceeded £516 million net since it was launched in February 2013.

But if the industry has missed out on potential sales, the public sector may have missed out in other ways. Bill McCluggage, who was the Government’s Chief Information Officer between May 2013 and February 2014, said saw significant pent-up demand among many Local Government agencies and public sector bodies for cloud services.

He believes many of them delayed their own IT procurement projects in anticipation of a cloud computing option being available.

“There’s a year’s worth of lost opportunity in the middle of this,” he said. “There are case studies of organisations that have made 50-60 per cent by going to cloud service delivery, so how much has the State actually lost because of the length of time it’s taken to do the GCSC? I’m very supportive of the new ICT strategy and of the new CIO Michael McGrath, so there must be very clear reasons why the GCSC was cancelled.”

Standards

The cancellation notice to suppliers claimed a significant proportion of the responses received did not meet standards set out in the request for tender. It said this meant many of the lots would not have been viable.

Industry attention now turns to the revised Government ICT strategy which proposes a “build to share” model to ensure compatibility and consistency of technology usage across the public service, delivered via a Government cloud.

“This new approach involves a more focused cloud service framework for key infrastructure and common ICT systems in the public service. Work on developing this is underway. On this basis it was decided to cancel the GCSC as it would not have delivered what was now required for either the public sector or the industry,” said a spokesperson for the Department of Public Expenditure and Reform.

ICT Ireland called for the new strategy to receive full support from across Government. Mr Sweetman said an important step in its success would be if the interim Government chief information officer Michael McGrath is given clear authority to implement change. The group also called on the Government to make the interim officer, who has been in place for more than a year, a permanent appointment.