The ‘G-cloud’ could help achieve the £7.2bn back-office savings required by ministers – but what is it?
The Digital Britain report promotes a ‘G-cloud’ as a way of contributing to the £7.2bn of savings in back-office and IT services identified in the Treasury’s Operational Efficiency Review, but what is it? To understand the G-cloud you need to get behind some of the jargon – bear with me.
One way of reducing IT costs is through hosting. Instead of operating your own IT installation, you can choose to house your systems in somebody else’s data centre. You will usually pay a fixed monthly fee to a commercial company or partner that will provide the computing capacity, backup, staffing and buildings and pay the utility bills.
The host organisation can provide these services at significantly lower cost. They can take advantage of economies of scale, managing peak processing times and reducing the level of unused computing capacity (the average server typically runs at less than 10% of capacity). Hosting can substantially reduce costs and provide for recovery in the event of fire, flood or other disaster.
‘Software as a service’ is the latest stage in the evolution of hosting. It builds on the idea of application service provider models that were originally developed in the 1990s and early 2000s. This is where the software application runs on somebody else’s computer to provide the software service that you require, perhaps HR or procurement, usually in return for a fixed monthly fee. The costs are kept low because your organisation is sharing the application and IT infrastructure with other users. IT just becomes a commodity; it provides a required service for a standard cost.
SaaS is particularly attractive for smaller organisations that want to use relatively common applications such as e-mail, finance and HR solutions. They don’t need to invest in one-off capital purchases of new systems. They don’t need to implement and manage a complex IT infrastructure or have responsibility for the buildings, staffing and utility bills.
The software is sometimes referred to as ‘cloud computing’. This is because whenever an IT expert draws a diagram of IT systems, it has become standard practice to draw a picture of a fluffy cloud to represent the internet. This ‘cloud’ signifies that the location of the hardware and software is irrelevant; it sits beyond the boundaries of the traditional IT department and it could reside elsewhere in the UK or overseas.
Millions of consumers already unknowingly use cloud computing to purchase from Amazon or e-mail using Yahoo or Google mail, and increasingly the business market is seeing this as a way of reducing costs and increasing both access and flexibility.
In most cases, to access SaaS/cloud computing all you need is a web browser and access to the internet. It can then provide your e-mail, desktop, finance, procurement and many other systems. As it is web-based, it makes it easier to integrate with mobile working, supplier and partner systems, and to share activities across multiple locations. It has also been claimed that it is easier to upgrade as circumstances and technologies evolve. We can expect to see the big software suppliers producing more public service applications on a SaaS basis.
In conjunction with the implementation of Digital Britain’s findings, a strategy study is now under way to see whether a private cloud for government – a ‘G-cloud’ – can be created to allow local government and central government departments to share centrally hosted applications with assured levels of security.
If you are a public sector organisation considering cloud computing, you will want to understand if and how it fits into your organisation’s IT strategy. And, as it is an externally hosted service, you will need to understand and assess the viability of the contractor and the security implications. You will also want to know what happens in the event that some or all of your users lose their internet connections.
In 2007/08, the UK public sector spent £16bn on IT and £18bn on back-office services. There is currently a lot of hype around cloud computing and a range of definitions, but there are also questions about security. However, there could be huge savings through its widespread adoption.
John Thornton is an independent adviser and writer on business transformation, financial management and innovation, and executive director of e-ssential Resources
