On May 15, 2012, the Infocomm Development Authority (IDA) of Singapore announced that it would award its much-awaited externally hosted g-cloud infrastructure five-year tender to SingTel. My colleague Jennifer Belissent and I published a report on g-cloud opportunities in Asia Pacific late last year that highlighted Singapore as one of the governments leading the way toward g-cloud adoption in the region.
Some key highlights from the Singapore g-cloud contract:
- SingTel will be responsible for all of the capex- and opex-related costs needed to build and manage the central infrastructure from its own data center in Singapore.
- Singtel will provide a central “G-Cloud Service Portal” to all government organizations and departments to access central g-cloud services (computing, storage, database, archiving, networking, and other basic resources) and derive revenue based on a subscription model.
- The Singapore government has not committed to any particular minimum g-cloud usage level.
- SingTel will provide the required training to government departments on g-cloud functioning.
Based on our discussion with various vendors, Forrester believes that security, resiliency, and scalability of the central g-cloud were IDA’s key priorities when selecting a vendor. SingTel appears to have been the safest local bet for the government, as it has an end-to-end cloud story (IaaS, PaaS, SaaS) bundled strongly with network connectivity and security.
What This G-Cloud Contract Means To SingTel: Building A Strong Business Model To Ensure Revenue Stream
It will not be easy for SingTel to make the g-cloud contract profitable, especially in the absence of any commitment to minimum g-cloud usage or a minimum number of subscribers on the part of Singapore government. In addition, the success of g-cloud implementations largely depends on integrated collaborative efforts from government agencies, which is often a challenge. SingTel will take at least a year to get the infrastructure up and running and will have a limited time frame to recover its investment thereafter.
Getting government agencies to subscribe to the central platform will be the most challenging task for SingTel. To overcome this challenge, they’ll need to work closely with IDA, government organizations, conduct training programs, develop innovative services, and guide internal teams and partners to lead g-cloud engagements with the Singapore government. Also, we believe IDA will support SingTel by encouraging government entities to subscribe to central g-cloud infrastructure. Some key areas on which SingTel can be more focused:
- The Singapore public sector has 15 ministries and 50 statutory boards. If major government entities subscribe to a g-cloud platform first, smaller departments will eventually follow. Prioritizing departments to get a fair view on opportunities in dollar terms will be the key for SingTel.
- The Singapore government will roll out separate tenders for SaaS and PaaS later this year. Government clients have a strong tendency to go with existing vendors for subsequent contracts. Thus, SingTel has a very good chance of getting those contracts from the government, as the company has offerings on SaaS — including office productivity, finance and accounting, HR, and supply chain management — and on PaaS (MyBusiness platform).
- SingTel recently won a bulk tender to offer public cloud services to the government, which is valid for two years with an option for a one-year extension. This will help SingTel form a strong relationship with government entities to subscribe to the central g-cloud platform when it is ready.
- SingTel is part of a consortium called OpenNet, which is deploying a next-generation national broadband network in Singapore. Through the fiber network, SingTel can provide high-end services such as video chat and content sharing for government-to-government, government-to-business, and government-to-citizen interactions through the central g-cloud platform.
- SingTel has an opportunity to leverage its recently acquired (from Amobee) mobile technology by providing innovative applications and services to the government to better connect with citizens through central g-cloud infrastructure.
The success of the Singapore g-cloud project largely depends on the experience of government agencies in a shared services environment and incentives that the government plans to provide to agencies to ensure maximum participation. Moreover, moving to g-cloud is a paradigm shift for the Singapore government; most would prefer to continue working with an initial vendor (SingTel) than getting a new vendor once the old contract expires. Nevertheless, a lot will depend upon ‘experience’ that SingTel provides to government entities on this initial project. Any issue with g-cloud infrastructure project will push SingTel on a back-seat in front of the government. It will be interesting to see how SingTel executes its strategy to make the Singapore central g-cloud project successful.