Systems integrators who had traditionally delivered up to 80 percent of public sector IT work are heavily cutting prices in order to compete with the G-Cloud.

The G-Cloud is being promoted by the government as the key to significant cost savings across departments by introducing competition and the cross-sharing of information in order to drive savings.

The system integrators which had traditionally enjoyed an effective stranglehold on government department IT contracts are now attempting to entice departments from turning to cloud services with discounted rates and by matching prices offered on the cloud service.

Director of the G-Cloud Programme Denise McDonagh has criticised the cost reduction: “That makes me furious for two reasons. One, you should be moving to a different way of buying and reducing your dependency on the big SIs. But it makes me more furious that an SI can either deliver that service a lot cheaper than they previously said or they are taking a loss.”

Public Cloud market to increase by $20 billion in 2013