In a significant development, Microsoft has barred Small and Medium-sized Enterprise (SME) partners from reselling its services through the government’s Cloud Compute 2 framework.
Microsoft’s Position in the Framework
Microsoft secured a spot on the framework’s first Lot, designed for public sector IT buyers interested in directly purchasing cloud services from hyperscalers. However, Microsoft’s framework application revealed a significant decision – partners were not allowed to resell its services through Cloud Compute 2. This exclusion led to the banning of some pure-play Microsoft reseller partners from participating in the framework.
Impact on Partners and SME-Friendly Framework
Partners affected by Microsoft’s decision expressed dismay, highlighting the substantial investments made in becoming specialized Microsoft cloud partners. The decision contradicts the framework’s supposed SME-friendly design, as Microsoft’s refusal essentially eliminated its entire distribution network and partner channel.
Standstill Period and Appeals
Following CCS notifications to Cloud Compute 2 suppliers, the procurement process entered a standstill period lasting 10 calendar days, scheduled to conclude on November 27. Microsoft partners have appealed to CCS to overturn the decision during this period. However, CCS’s response indicated limited options, emphasizing Microsoft’s right, as per the framework’s terms and conditions, to ban third parties from reselling its services.
Possible Submission Error and Framework Challenges
There is speculation among affected partners and industry experts that Microsoft’s decision may be a submission error. The challenging application process for the Cloud Compute 2 framework, described by some as “the tender from hell,” had previously raised concerns, particularly for SME suppliers.
Efforts to Resolve the Issue
Partners have attempted to escalate the matter within Microsoft, hoping to communicate the impact of the decision in the public sector. However, internal efforts have yielded limited results. Despite potential errors or glitches in the submission process, the prevailing sentiment is that CCS may not allow a revision, potentially impacting the success of the framework.
Framework Usage and Future Implications
Data suggested that the first iteration of the framework, live since May 2021 and set to expire in May 2024, was not widely used by the public sector due to perceived difficulties. If Microsoft’s decision was a submission error, reopening the procurement process could be challenging and costly, posing a dilemma for all parties involved.
CCS Response and Regulatory Constraints
CCS, approached for comment, declined discussion during the ongoing standstill period, citing regulatory constraints outlined in the Public Contracts Regulations 2015. The spokesperson emphasized the inability to engage in dialogue regarding the intended results until the procurement process concludes. The situation underscores the complexities and challenges in government cloud services procurement.
