What Germany can learn from the EU

Design cloud framework agreements sensibly What Germany can learn from the EU

22.02.2021

With well-designed framework agreements, the possibilities of the cloud in administration can be fully and, above all, easily exploited. In Europe we have seen many approaches to multi-cloud framework agreements in recent years.  The se contracts enable users to initiate cloud projects and, in conjunction with a cloud strategy, advance the digital transformation in administration.

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One of the prerequisites for cloud framework agreements with a wide variety of cloud service providers is a procurement system that is efficiently structured and creates intelligently set framework conditions. If you take a look at the procurement systems in Europe, you will see that they often differ in their design, and there are reasons for these differences.

 The se lie on the one hand in the specialist knowledge of the procurement authorities and consumers and their previous experience with IT framework agreements, on the other hand in the legal provisions that regulate procurement in the respective countries.

A cloud procurement system consists of:

• Award procedure: How is the initial procedure designed? What individual requests are there for specific requirements? This can be done either directly, through mini-competitions or via a selection matrix with which a decision is made based on firmly defined criteria.

• Contracts:

   The se can be framework contracts and order processing contracts.

• Design of the presentation and access for the users, for example by a third party – often called a cloud broker or reseller – who provides a management platform, for example.

Make full use of the possibilities of the cloud

Under European procurement directives, the appropriate procurement procedure for a cloud framework contract is usually a negotiation procedure with an upstream participation competition.

 The  framework agreement is often linked to the provision of a management platform by a third party. With framework agreements, the advantages of the cloud – flexibility, size, scalability for better availability at lower costs, greater variety of functions, a high rate of innovation and adaptability to new requirements – can be fully exploited.

Framework agreements with and without a cloud broker or cloud reseller

 The  most common framework contracts concluded in Europe are:

• Direct framework agreements with cloud service providers without the interposition of a cloud broker

• Framework agreements with a cloud broker or cloud reseller who orchestrates the cloud services

Both variants have advantages and disadvantages for the user and the central office placing the tender.

 The  framework contracts can also be refined through various lots that meet the provision of services and consulting services.

 The  direct framework agreement

A direct framework agreement without the interposition of a cloud broker offers advantages due to direct access to capacities and innovations. In addition, the consumer can benefit from price reductions from the cloud service provider. Further advantages are the development of internal knowledge and competencies in the public sector by dealing with a cloud strategy, greater legal certainty and transparency through a direct contract and no dependencies on service providers and consultants, whose quality can fluctuate.

 The  framework agreement with a cloud broker

If a cloud broker is interposed, it can take on various tasks – from offering a personalized management platform or target zone to fully managing cloud services. An analysis by Gartner from 2019 names three areas of responsibility for cloud brokers: aggregation, integration and individual adaptation to customer needs (customization). A broker can manage the use, performance and provision of cloud services and mediate between the CSA and the consumer. Last but not least, it guarantees quality, security, compliance and performance along the entire value chain of services.

Example: European Commission “Cloud II”

 The  cloud strategy of the European Commission (EC) published in May 2019 declares cloud computing to be a pioneer for the digital transformation of the EC. With its cloud-first approach, the EK wants to help EU institutions to increase agility and innovation, optimize costs and improve security.

 The  EC sees the establishment of a central purchasing mechanism through which the EC and EU institutions as well as the European Central Bank and the Council of the EU can purchase cloud services as a decisive step on the path to digital transformation.

 The  cloud procurement platform created by the General Directorate for Information Technology (DIGIT) and the “Cloud I” framework agreement were set up in 2014. In the last six years, “Cloud I” has been further developed in cooperation with cloud service providers and consumers and updated in 2020 with the Dynamic Purchasing System (DPS) “Cloud II”.

Simplified procurement and a dynamic purchasing system

“Cloud II” has a simplified procurement process and, unlike in “Cloud I”, no longer places an external broker or third-party provider between the consumer and the cloud service provider. With “Cloud II” 65 users can procure cloud services that meet the specified security and compliance criteria.

 The  contracts were concluded between the EK and the providers.

 The  EK designed the “Cloud II” framework agreement in such a way that the users have the freedom to implement their own IT sourcing and data strategies and to purchase cloud and related consulting services.

 The  EK acts on behalf of the EU institutions as a cloud broker and organizes mini-competitions, manages the accounts and handles the billing process.

 The  framework agreement has a term of four years. However, each contract awarded through a mini-competition can last for up to seven years.

 The  EU Commission as a cloud broker

 The  second version “Cloud II” of the cloud framework agreement is based on an analysis of extensive market discussions in order to integrate the feedback from users and providers and to improve the framework conditions. Above all, this has led to the EK itself taking on the broker role.

 The  DPS promotes flexible award mechanisms that are designed for innovation. New providers can be added to the contract at any time. In contrast to framework agreements such as France and Italy, the service catalog has not been restricted and enables users to access a huge portfolio of providers.

 The  DPS, however, requires experienced users with knowledge of cloud usage or support from experienced agencies.

Conclusion from the comparison of the cloud framework agreements

Many of the framework agreements still have to prove themselves in practice. Framework agreements that have been in place for a long time show the importance of adaptations to users and market surveys.

Experience also shows that it is expedient to start with a framework contract, to learn from the requests and to gain experience and adapt them accordingly. This has led to better results compared to approaches that have been worked on for a long time in order to create a supposedly “perfect” solution.

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