What the changes really mean for the public sector...
The UK public sector is gearing up for what could be the biggest change for decades to the way it buys and uses technology.
By 2015, half of all new IT spending by government will be on public cloud services - scalable, shared software and systems which are accessed over the internet.
For the government - so often accused of paying well over the odds for unnecessarily bespoke systems - moving to off-the-shelf commodity IT model offered by the cloud means undergoing fundamental change.
It could mean no more projects on the scale of the 14-year £11.4bn National Programme for IT, opening up the £17bn public sector IT market to suppliers beyond the big five who traditionally carry out 80 per cent of the work, as well as the loss of public sector IT roles as the existing inefficient model of government technology is swept away.
According to Chris Chant, director for the government's cloud programme, the changes will be unpopular in certain quarters but says that the way the public sector buys IT has to change.
"There are lots of people who won't necessarily see this as a good thing to do - there are a bunch of people for who any change is not a good change," Chant said.
"The difference is it's not about what organisations want to do any more, it's about what organisations need and can afford."
First to feel the pinch: the big tech suppliers who are the only companies with deep enough pockets to front government contracts that span years and cost upwards of hundreds of millions pounds.
If cloud is to become the pipeline through which government IT will flow then these suppliers could well find themselves out in the cold - these big suppliers are not set up to deliver the patchwork of commodity software and services that government will rely upon in future.
"Suppliers are going to change quite dramatically. [Currently] we go to those suppliers and say 'run our IT please'. They are not in the product market. A few have products of their own but mostly they respond to what an organisation wants to run its entire IT," he said.
The problem is that, in general, the government will no longer be looking for someone to build and run bespoke IT, Chant says.
"We're doing fundamentally the same stuff as other organisations, and other organisations are going off and buying commodity IT solutions - there's no building of the infrastructure and software, which is the model that we've come from," he said.
"It seems unlikely they [existing large suppliers to government] will fulfil all our needs in that respect. We need to buy our stuff at the right price and when we're in a commodity market [you have to ask] how competitive are they going to be in that space when you've already got commodity suppliers out there."
Early indications are that there are...