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British MPs Take a Close Look at Government IT 'Oligopoly' of Major Vendors

BY Nick Judd | Friday, July 29 2011

Writing for The Guardian, Michael Cross digs in to a report on British government IT that finds the folks across the pond are over-reliant on large contractors for their IT needs:

The central charge is that governments have "wasted an obscene amount of public money" by buying systems on too large a scale from too few suppliers. One headline-grabbing figure: the Cabinet Office spends £3,664 per desktop computer for every employee.

But what's really damning about the report is where it points the finger – at big IT. The MPs refer to "extremely serious allegations" about an "oligopoly" of giant suppliers who handle the vast majority of central government's IT. The allegations, of anti-competitive behaviour and collusion, were apparently made by smaller companies (SMEs) in a closed session of the inquiry held under the Chatham House rule. The committee calls on the government to commission "an independent, external investigation" into the alleged cartel.

Among the reasons for an over-reliance on big vendors, according to the report, is lock-in because government agencies refused to take the risk of migrating off of a legacy system or because of a lack of foresight in licensing intellectual property rights to systems developed on their behalf.

"As a result," according to the report, "the government may not have rights over systems it has paid for."