The “vast majority” of suppliers named on GCloud 10 are not winning work from it – and 86% of companies have not earned any direct revenue through it at all.
The claim comes from new research from public sector procurement analysts Tussell (available here on registration).
Its study point out that GCloud (also known as The Digital Marketplace) was originally designed as a quick and easy procurement framework to connect buyers with suppliers offering innovative cloud solutions.
It has subsequently grown to become “indispensable in the provision of public sector technology”, with more than £4bn being spent through it since 2012. Although spend through G-Cloud by the wider public sector has been increasing since 2012, 80% of spend has been by Central Government, accounting for £3.3bn in total. This is reflected by its top users, Home Office, Ministry of Justice and HMRC, who alone account for over 40% of the total spend.
The problem, it claims: “Just being on the framework isn’t a guarantee of winning any work from it”.
But don’t immediately assume that’s because of the Oligopoly – that only big Systems Integrators are winning work, it cautions. The reality’s a bit more complicated than that, it seems:
“The majority of suppliers on G-Cloud have always been unsuccessful. For example, on G-Cloud 10 just 14% of suppliers listed have actually won business. However, of the minority of companies getting work, a relatively high proportion are SMEs.
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“This suggests that it is the quality of the bid, not the size of the supplier that counts.”
In fact, states the study, How to be more successful through G-Cloud, “In comparison to the wider public sector, customers purchasing through G-Cloud spend relatively more money with SMEs. Since 2012, SMEs have won £1.8bn worth of work, equating to 45% of all spend. This far exceeds the Government’s target of spending 33% of all procurement with SMEs. On average, SMEs have won £1.6m of business through G-Cloud versus £4.2m for non-SMEs.”
The more likely explanation, Tussell theorises, is that too many tech vendors assume that just getting on to the Marketplace is all they need to do – and they forget to sell!
“Too many companies expect that once on G-Cloud, opportunities will come to them – but buyers have over 4000 suppliers to choose from so the competition is intense,” it warns.
“If you’re a supplier struggling to realise the potential of being on the framework, it’s worth reviewing your go-to-market strategy.”
The report then gives some very sensible advice on improving your chances on GCloud, including:
- Be proactive by anticipating upcoming contracts
- Identify the right customers and then focus your efforts on them
- Work with partners to widen the range of contracts you can work on Challenge competitors who can more readily be dislodged
- Plan your strategy with practical market sizing and segmentation.