Why more than two-thirds of suppliers on G-Cloud 10 never made a penny

It's fair to say that the IT channel endures a love-hate relationship with the G-Cloud framework.

Launched in 2012, the government touted the procurement vehicle as a simpler way for public sector organisations to buy, and for IT suppliers to sell.

But even seven years into its existence, questions remain over whether it is fit for purpose, with many SMEs struggling to win business as hundreds of new suppliers join with every new iteration, and the likes of Amazon Web Services, Capgemini and IBM slurp up the majority of sales.

Data published by Crown Commercial Service (CCS) reveals that, of the 3,500 suppliers on G-Cloud 10 (which was replaced by the eleventh iteration in July), less than one third transacted any business.

And of the total £594m spent through G-Cloud 10, around one quarter of sales went to the top 10 suppliers - the largest being AWS at £31.7m.

But despite competing with the biggest names in tech, it is possible for smaller suppliers to take more than their fair share of business through the framework.

At CRN's Channel Conference MSP on Wednesday 2nd October, Advice Cloud CEO and public sector procurement expert Chris Farthing will give a masterclass in how suppliers should position themselves on the framework to maximise returns.

Channel partners can register to attend the free event by clicking here.

Speaking to CRN ahead of the event, Farthing highlighted four challenges that small suppliers face when trying to thrive on G-Cloud, and how to go about facing these issues.

1. Listing the right services

Farthing said that many suppliers fall at the first hurdle by making errors in their listings (which advertise the services they offer) and accompanying documents.

He explained that some will list too many services, but then realise that they do not have the resources to cater for what they have proposed.

"Pay attention to your listing," he said.

"Are you shooting yourself in the foot by having a listing that isn't viable or doesn't do you justice?

"The more listings you have, the more effort it will be to get something out of them. If you put services up, they have to be something that you can put effort behind to be able to sell."

2. Expecting business to come to you

Secondly, Farthing said that some suppliers believe they have done the hard work by winning a spot on the framework, but this is not the case.

The hard work actually comes once you are trying to make yourself stand out in the crowd.

"You have to realise that G-Cloud is not a source of inbound leads," he said.

"It does require a plan and some idea of why your potential customers will want to buy your stuff. Unless you are doing something really, really niche - and the public sector wants to buy it - the leads won't come to you.

"So don't start thinking that you're new to it and you're going to start getting multimillion-pound deals. Start small, build a reputation and word will get out."

3. Knowing who to target

Farthing said that a lot of newcomers on the framework treat the public sector as one generic buyer, which is a mistake.

He said each department will buy in a different way and for different reasons, so it is important for suppliers to work out who they want to target and why.

"Where do they want to start?" he said. "The government sector is huge, at £18bn spent a year with 38,000 potential clients - maybe even more.

"You need to have a sales plan, a target market and an understanding of where your value proposition fits in.

"The health sector is going to be different to the Ministry of Justice, which will be different from the military… they all have different reasons for buying.

"If you're just reselling Microsoft Azure then it is just a case of why you, against the 9,000 other Azure migration services?"

4. Getting your pricing right

You could perhaps expect this to be the most important aspect of a G-Cloud listing for suppliers, but Farthing said that the vast majority of SMEs fail to make their pricing clear for buyers.

If this happens, potential customers will likely move straight on to one of the other suppliers offering similar services.

"Their pricing documents are usually unintelligible," he said.

"I cannot buy their services from their pricing documents because I can't work out how I need to buy.

"Buyers will have a longlist of suppliers, and then to get to a shortlist they'll check a number of things and you can just be discounted very easily. Pricing is one of the biggest things that we work on."

Among the other event highlights, award-winning cybersecurity blogger Graham Cluley will be exploring how MSPs can build a compelling narrative around cybersecurity.

Back by popular demand, the CEO and CTO of ANS will also be laying out the Manchester-based firm's (almost overnight) reinvention from reseller to cloud services provider. 

MSP bosses will also have the opportunity to quiz private equity experts on how they can maximise the value of their business during a panel discussion.

See here for the full agenda.