In February 2012 the Cabinet Office launched something rather revolutionary: A catalogue of IT services, available on-demand to any public sector buyer, with predictable prices, and from pre-vetted suppliers. This innovation much-simplifies normal public sector procurement process.
The “CloudStore” is updated every six months, so it’s about to enter its third incarnation. It currently lists 3,500 services offered by hundreds of suppliers. Critically, it lists many services from smaller suppliers, for whom the cost of sale to the public sector has traditionally been prohibitive.
Take-up has been fairly slow, but the CloudStore is certainly an innovative and forward-thinking idea. Assuming continued central government backing, we can expect accelerated adoption soon.
So why hasn’t something similar happened in the private sector? What consequences would there be if a “Private Sector” CloudStore did emerge?
Public and private sector catalogues would need to contain much the same content, and similar prices. This would constrain suppliers’ flexibility on margins in the private sector.
At slack times suppliers might run clearance sales, discounting their prices to get their “benches” down.
If the private sector catalogue took-off, there would be ramifications for sourcing advisors and procurement managers. Some specialist roles might disappear altogether, and new “CloudStore” specialisations would likely emerge.
“Shadow IT” would also get a boost. CMOs, CFOs and others are already buying cloud services themselves, by-passing the IT function. That behaviour would only be exacerbated by a private sector CloudStore, and such a shift would further accelerate the evolution of the CIO role (more on this in future articles).
We could expect the emergence of competing CloudStores, each seeking sales commissions from suppliers, but reducing rates in return for exclusivity, or increasing them in return for front-page placement. Might CloudStores (or at least CloudStore integration) become one feature of the Cloud Broker services some suppliers are already offering?
Might “Compare-the-CloudStore” sites appear? And might they have global reach, to appeal to multi-nationals?
Finally, as in the public sector, smaller niche suppliers may find it easier to get a foothold with larger buyers, where previously they found the cost of speculative sales too high to bear. But more interestingly, the converse would also apply in the private sector: Smaller buyers might find it easier to browse and buy services from large suppliers, who might previously have given airtime only to larger enterprise customers.
Do tell me what you think. Are private sector CloudStores a realistic possibility? Or even an inevitability? What do you predict in 2013-14?