UK Government ICT Storyboard July 2010

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1 UK Government ICT Storyboard July

2 SOME BASICS: ICT across the Public Sector has key challenges that have arisen through the silo d and individual development of ICT Today s Challenge ICT costs and legacy systems Duplication Supplier lock-in Long timescales Numerous, large projects Lack of SME support Public Sector spending on ICT is approximately 16.9 billion (4.6% of Public Sector expenditure) each year and supports a sophisticated and substantial ICT base Most areas of the Public Sector have similar ICT requirements, yet each provides its own solution often duplicating what already exists Suppliers to Public Sector organisations are able to lock themselves into long contracts and render themselves indispensible as they own the ICT stack Procurement activities are time consuming, costly and result in further lock-in of suppliers. It is so painful and expensive lets make the contract long... There are multiple large scale projects on-going across the Public Sector, but little ability to influence the upfront policy or design, development or ICT approach SME s cannot afford to bid, large suppliers look to pass risk onto SME s that they cannot sustain 2

3 SOME BASICS: Gartner Global ICT Spending Analysis (average) by ICT Element indicates where money is typically spent in ICT So UK Gov ICT Spend of 16.9bn may go... Data Centres 3.2 bn Desktop 1.85 bn Data Network 1.69 bn Voice Network 1.01 bn Help Desk 1.18 bn Application Dev 3.04 bn Application Support 3.04 bn Finance, Man, Admin 1.85 bn Source Gartner analysis January

4 THE ICT STACK: The ICT Strategy focuses on the bottom of the stack, the utility end as this is where substantial opportunity exists for standardisation, simplification, common use The Technology Stack Common Capability Shared Infrastructure Reduced Costs Specific ICT to that department only Specific to that organisation Reduced costs through competition The Government Applications Store Shared Services Use and Re-Use across departments Shared components Open source/ standards/ innovation The Government Cloud Data Centres Simplification, standardisation, Common shared Infrastructure Voice and Data Telecommunications Desktop and Peripherals Common open Standards and Architecture Simplification, standardisation, mandation Reduced costs through consolidation simplification, mandation 4

5 Data Centre s Tier Uptime % Hours Down per 5 Years Cost Index Central Government has Wider Public Sector Has (tier 2+) I Police 88 II III IV List-X Local Government 400+ NOTE: Not in Business Case A Tier IV Data Centre costs approximately 750 and 2,000 per square foot to build. A List-X facility is a specially protected and secured UK Government data centre (although maybe run/owned by a third-party). The security addresses people, process, physical and technology. Issues. 5

6 The Data Centre Strategy looks to reduce from 220+ to 9-12 in central government and encourage an overall reduction of 80% across the Public Sector The Data Centre Strategy Today Future A survey carried out on 23 Government departments from January to May 2009, identified 128 separate data centres 6 : Over 30 require major renovation in next 5 years. 16 share location with non-government organisations. 83 are connected directly to the internet. There are over 8,000 server rooms across the public sector estate - are too small to qualify as data centres. 29 different suppliers own or operate data centres 18 had over 6,500m 2 of spare capacity. There is evidence that this will provide savings - DWP consolidated five data centres to two, realising a saving of over 30% from its total ICT spend 7. Reduce the data centre infrastructure costs by 300 million per year by 2015, and reduce cooling and power consumption by 75% per year by Reduce the number of data centres to from an estate of approximately 220 (including those outsourced to suppliers). Reduce hardware maintenance, server capital expenditure, power consumption and cooling requirement, higher server utilisation, reduced dedicated Disaster Recovery requirement. Additional benefits will be realised in the wider Public Sector: Police Authority a further 88 data centres Wider Public Sector a further data centres By 2014/15 the Data Centre savings achieved are anticipated to be in the region of 488 million annually across the Public Sector* *Option 5, G-Cloud Programme SOC, Version saving is 651 million for all Public Sector. Page 110 of the G-cloud SOC assumes that 75% of the savings relate to Data Centre Consolidation. 6

7 If we have over a thousand data centres and 8,000 server rooms and over 5 million PC s and laptops, how many telecommunications networks should we have? On average, each Data Centre in our survey is connected to 35 separate networks but the public sector has many hundreds. Slide 45and PSN detail 1.69 bn pa cost Today Tomorrow UK Health Industry the worlds largest Virtual Private Network GCHQ the worlds largest Wide Area Network Every Department, every Public Body, every Organisation, every Office has a separate network 1000s of networks The Public Sector Network (PSN) will provide a single telecommunications platform that can accommodate multiple suppliers. It will allow open competition and open standards, and improve security. The PSN outline business case estimates annual savings in the region of 394 million across the Public Sector by 2014/15. This excludes savings from moving some mobile costs over this network. We spend 1bn pa on mobile. 7

8 The Systems Integrator lock-in and the SME lock-out Today The top 12 ICT suppliers get over 60% of the ICT spend Application Infrastructure IT Stack Each layer is intricately linked and dependant on the next The Systems Integrator selects all and locks us in It can take 77 weeks to bid for a Government contract SME s can t afford to bid, or have the resources to tie up for so long Suppliers claim framework bids can cost up to 500k, full bids up to 10m and about 5% of full project costs is for the procurement (imbedded in the 16.9bn) Government procurement approaches try and pass all the risk to the supplier s balance sheet. SME s cant take that risk The EU procurement rules say we cannot specify an ICT product or brand. The SI s select the products, the brands, the architecture Frequently in outsourced contracts the SI design, develop, run and maintain the whole ICT stack. You want to change you pay The ICT Strategy breaks this model 8

9 It gets complicated A supermarket analogy They own the store They heavily influence product input price They decide what they want to sell They decide how much they tell you They decide on store setup They set the output price If you want to buy from them you use their checkout The buyer can go to many stores at no cost Suppliers to them are subservient In store the product provider are disintermediated The buyer can buy the same product from many sellers 9

10 And the Systems Integrators work in a similar way They frequently own the store (the data centre) They heavily influence product input price (SME s products) They decide what they want to sell (the procurement process) They decide how much they tell you (the bid, billing) They decide on store setup (technology/stack) They set the output price (cheapest on bid, not cheapest) If you want to buy from them you use their checkout (they control subs) The buyer can t go to many stores (contract, Costprocurement) Suppliers to them are subservient In store the product provider are disintermediated The buyer can buy the same product from many sellers (in theory) 10

11 So what is the G-Cloud or Government Cloud?... Definition 23 WARNING: Definition 23 We found 22 different definitions of Cloud Computing none matched what we are proposing, so we have invented our definition, DEFINITION 23. So it would be wise not to make assumptions about what you think G-Cloud is/is not. What it is A set of consolidated data centres The Public Sector Network The Application Store for Government Separation of infrastructure providers from software providers from technology stack providers Software is purchased by the crown on a pay-for-use basis, not licensed Shared common infrastructure and common computer systems that are generic too many. It offers all technology stack options such as Microsoft, IBM, Linux/Unix/Open etc. It provides an open market place for SME products and services as well as the option for them to use G-Cloud for their customers What it is NOT A single data centre or all data centres from Government A single Cloud doing all work for all departments Purely Government only. Departments can use private sector clouds (Google, Microsoft, Amazon, etc) as well A single supplier doing applications, infrastructure, technology stack Dedicated to a single technology stack vendor such as Google, Microsoft, IBM, Linux/Unix etc. 11

12 G-Cloud works with existing department ICT and other clouds They work at different security levels and support open and proprietary technology. Departments focus solely on things unique to them, G-Cloud on the shared DWP Amazon Unclassified/ Restricted Justice Google Unclassified G-Cloud Shared common infrastructure for Common systems/ Utility computing HMRC Salesforce. com London LA s Microsoft unclassified/ Restricted 12

13 G-Cloud, isn t one thing: It has five worlds : Hosting, Testing, Sharing, Web, SME. Departments want and need different things so G-Cloud needs to offer them flexibility to make the offer compelling Shared world ERP HR/ Finance Shared App DierctGov What can be shared, should be shared. Common shared systems for all too use. Web world Gateway Online/web services to employees/ citizens and business Testing world I don t want to buy computers to test new systems, can I rent them from you? BusinessLink Data.gov SME world I want to use your G- Cloud to offer services to my non Government customers. UK tax growth, innovation App App Hosting world My computer systems are fine, I just want to close my data centres and use yours. Give me economies of scale, security and growth, reduce my capex need 13

14 And drawn another way it looks like this each world is provided with the basics of storage, processing etc. but have freedom to develop and run software using any technology stack on the common infrastructure Hosting Testing Shared Web SME Data Storage Processing Capacity Security, Resilience, Support Software design, development, testing and integration tools/ components A choice of technology stack vendors 14

15 So where does the Application Store for Government fit in? It s a bad name, think of an ebay for Government, but with a twist App Government Applications Store ebay App App App App App It Includes this: Classifieds, Buy it now, Auctions Suppliers/ SME s can have their own store front Anyone can be in the store Marketing is cheap SME s don t need capital to prove their software they can test it on the G-Cloud No SI lock-in No Technology stack lock-in Hosting Testing Shared Web SME Data Storage Processing Capacity Security, Resilience, Support Software design, development, testing and integration tools/ components A choice of technology stack vendors Any application from any supplier can be deployed on a common infrastructure using any back end technology stack (the lines) The infrastructure provider handles security and scalability. Think of it as the electricity grid. They don't decide what you do with it It is pay for use, there is no lock-in to long term software licence contacts It potentially provides a development and delivery vehicle for SME s to all their products globally, generating UK tax income and innovation 15

16 Uniqueness of technology solution So what does this mean for Departments technology, systems, data centres and people? High G-Cloud should be considered on a case by case basis Run on local departmental infrastructure, Controlled by department, Must conform to ICT strategy/ Standards Run on G-Cloud if application non core Mandatory use of PSN and Standards Run on G-Cloud Departments should consolidate all their ICT into this service Run on G-Cloud if application non core Low Low Size / Scale of Department and capability High 16

17 The Business Case Benefits for the ICT Strategy Programme Savings annually by 2014/5 Savings annually by 2019/20 The G-Cloud Programme Numbers are as per Option 5 of the G- Cloud Strategic Outline Case, Version The Public Sector Network Numbers are as per data underlying the PSN Outline Business Case, Version 2.8. The Common Desktop Figures based on estimated 5 million desktops across the Public Sector, as well as Gartner research on Total Cost of Ownership and benchmarking data. 651 million 1 2,971 million million 631 million 500 million 500 million The following assumptions have been made for the business case: 1. This is Option 5 from the G-Cloud Programme Strategic Outline Case, Version This figure comprises the savings from Data Centre Consolidation, Government Applications Store and the Government Cloud. The SOC assumes (page 110) that by 2014/15, Data Centre Consolidation will deliver 75% of the total Programme savings ( 488 million). In Phase 1, the savings from Data Centre Strategy were 300 million, based on 128 Central Government data centres and agencies controlled by them. 2. It has been assumed that of the total ICT spend across the Public Sector, 45% is attributable to Central Government, and 55% is attributable to all other areas, based on recent dialogue between the CIO for Government and HMT. 3. The business cases and assumptions have been developed independently of each other. As the Business Cases are progressed, analysis will need to be undertaken to address the risk of double-counting of benefits. 17

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