Case study - Going towards a university which is 100% in the cloud
We are a university which strives to develop interaction between research, education, collaboration and innovation that challenges boundaries. The procurement of ICT services is usually initiated by the head of IT with the support of the technical team (for the definition of the IT specs) and the procurers. They are responsible for the services that are purchased while the procurers are responsible for legal aspects. Usually larger purchases are carried out through an open bid. The bid is submitted to the procurers before its publication. The vendors usually have 40 days to respond. As a university, we comply with the computer laws. The vendor must have a Service Level Agreement that we can accept. Criteria used to evaluate tenders typically includes pricing and functionality requirements. Confidence in suppliers and regulations are also considered.
Why the cloud?
Cloud procurement of SaaS, IaaS, PaaS is not just moving from an IT solution to another. Rather it is about rethinking the applications that you currently run or adopting new services. We needed cloud to implement a cost-effective service for file sharing between different user clients and collaboration with others users, administrated by our university, to provide our institute with additional resources and to provide more agile services to our students.
How we procured cloud services
Our university has a long experience of procuring cloud services. The three examples provided below show different approaches to the procurement process and adoption of cloud services.
1. A central body conducts the procurement and produces an agreement that different departments can use to access the services.
2. A joint procurement action between some universities where one university (one partner) carries out the procurement for the other institutions.
3. No procurement at all. This method can be used when no money transfer is involved. A lot of no-cost cloud services exist and users access them with no central control.
In the future, we aim to move more of our IT-services to the cloud. As a further step, we would like to try procurement of public innovation (PPI) as we intend to buy services that do not currently exist. Suppliers are encouraging us to do this in order to push innovation initiatives. Elastic cloud services are an ideal working test bed for such approaches.
Procurement action #1: Moving to a controlled collaboration service together with all national universities
One of the first controlled cloud procurement actions was to purchase a cost effective service for file sharing between different user clients and collaboration with others users, administrated by our university. The national universities asked a single entity, the national university internet supplier, to perform the procurement of a service for staff and students. The overall procurement process took six months to complete. We also carried out some initial testing and requirements gathering. A pre-market analysis was then performed and an open tender was published reflecting the scale of the procurement action (<€1 million per year).
The main criteria for selecting the supplier were price and functionality, with the solution selected meeting these two requirements. A 4-year agreement was signed and no major issues were encountered in buying the service. Client and sync support was also negotiated in this process. The services are currently monitored through our admin console. The solution selected means that staff do not use un-procured cloud storage services such as Dropbox and provides the administration of 2,000 accounts. Universities can now deploy the solution at their institution and all legal issues are handled once by national university internet supplier. One of the major success factors of this procurement action was the collaboration between universities and the national university internet supplier. In particular, the fact that legal issues for all universities were managed by them.
Procurement action #2: Joint procurement with identified cloud provider
In this case we lead a joint national procurement process for four universities in our country. We were able to procure the solution through a joint Academic Agreement with the cloud provider which brought a substantial price reduction for all. The procurement action took six months. There was no need to define technical specs or to run a market analysis as the target of the purchase was clear. The selection of the supplier was conducted mainly on the basis of price and monitoring service modules available. The service was purchased through an open bid (the overall scale of the procurement was <€1 million).
One problem encountered was that no formal answer to the tender was received. This was because the role of the selected cloud provider and the relationship between the institutions was not clear. This transformed the open tender in a negotiated agreement. We purchased services for 1 year to be extended annually over a 4 year period. No problems were encountered with the supplier’s SLA and we were able to negotiate the agreement. We currently monitor the performances of the service through a cloud provider monitoring system. Since the formal closure of the tender, the process has run smoothly.
Procurement action #3: Procurement without tender
A number of years ago we sought collaboration tools and student/staff e-mails. Internally, we assessed the technical requirements and based on this investigated the market. We identified two solutions which were both free of charge for universities. No open tender was required as no payment involved. Nevertheless, we did hold disscussions with the providers regarding the suitability and adoption of their services. The overall procurement process took two months for each service. The main selection criteria for the suppliers was based on the Data Processor Agreement.
This was also the main point of discussion in the service negotiation. The services procured are still on-going and with no set duration. The services can be terminated by the procuring organization by merely sending a notification of service termination. The monitoring of the service is done through an admin console. The procurement process was extremely successful. The main barriers that we had to overcome regarded the legal implications of the Data processor Agreement.
What we learned
What worked well:
» Joint procurement saved a lot of time.
» Joint procurement offers a larger negotiation with the vendor.
» If joint procurement is applied carefully, legal matters as Data Processor Agreement negotiations only have to be carried out once.
What didn’t work well:
» In one tender we did not receive any bids due to confusion about underlying cloud service restrictions and monitoring tools.
» A powerful costs monitoring system to correctly allocate costs within the cloud services. When we buy cloud services we have to make sure that we can allocate the costs to different cost centers. We must be able to split the invoice internally to departments, projects, etc.
» The cloud vendor should be transparent and proactive. One negative experience of this was when the cloud provider was out of service. No communication from the cloud provider was received on this. We found out the service was down from a blog.
» Ease and timing of procurement are the most important aspects.
» Legal aspects and Data Processor Agreement is fundamental for procurement by public entities.
» Ensure that you have an exit strategy when you move to the cloud. » Restricted procurement for us is risky because the selection of suppliers can be complex. In the case of a supplier contesting selection, this could go to court.
» Marketplaces are problematic because a framework agreement doesn’t exist
» As a university we comply with the computer law and the vendor must have a SLA that we can accept. For instance, some large providers have problems with this because they use data for commercial purposes and this is unacceptable for our university.