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BUSINESS INSIGHTS June 2006

Helping find the way to better


public sector IT
Contacts:
IT in the UK public sector is under intense scrutiny and needs to deliver better results: much
Elaine Axby investment has been made which has too often failed to deliver. Projects have a history of
Quocirca Ltd being protracted and complex, offering significant challenges to all involved. The questions
Tel +44 20 8874 7442 being asked are: has the government lost its way? does it really know how to obtain success
elaine.axby@quocirca.com from these big projects? This paper looks at the challenges posed by public sector IT and
suggests better ways of managing these projects to deliver benefits quickly.
Clive Longbottom
Quocirca Ltd Executive summary
Tel +44 1189 483 360
clive.longbottom@quocirca.com • Government IT is challenging: projects are high profile; public sector organisations
are risk-adverse; the scale is huge with frequently changing demands of departments
and agencies; there are legacy systems, different applications and many, often
inconsistent, sources of data which are hard to discover and difficult to bring into
new applications
• Across all parts of the public sector, pressure is increasing to bring together different
IT systems and different data sources to develop pan-department services which
provide maximum benefits for the citizen whilst enabling working practices to be
more efficient. Here, re-use of existing systems and timely access to accurate data is
of the essence.
• However, government IT has a poor track record. Too much money is wasted on
complex projects which fail to deliver the anticipated benefits. The political
objective to have consistent services delivered locally across the country with
centralised reporting requirements, and (often) frequent changes in requirements,
means that at present neither citizens nor public sector employees are sufficiently
engaged in the process, with the result that big projects often fail to deliver the
expected benefits.

REPORT NOTE: • In IT, the fact that technology changes is a given – but much already exists to solve
This report has been written these problems and if used properly, can enable government to take a more staged
independently by Quocirca approach to IT developments, using standardised interfaces which enable the easy
Ltd to address certain issues integration of legacy systems, delivering quick wins and a roadmap to service
found in today’s public transformation. The challenge is managing this to deliver best value.
sector organisations. The
report draws on Quocirca’s • Government urgently needs to re-assess its approach to large-scale IT projects. It
extensive knowledge of the needs to understand technology better to be able to talk more openly to suppliers. It
technology and business needs to better understand the way risk is handled and that if project risk is totally
arenas, and provides advice passed to suppliers, then this will have a cost attached and will not necessarily
on the approach that deliver the benefits sought. In the long term, passing all of the risk to the supplier
organisations should take to
may lead to a vicious circle in which trust is lost between customer and supplier and
create a more effective and
efficient environment for all projects are carried out in a confrontational atmosphere.
future growth. • Government also needs to improve its approach to project organisation: the fact that
During the preparation of procurement cycles are so long means that the business issues and available
this report, Quocirca has
technologies have often changed by the time the project starts, hence a further
spoken to a number of
suppliers and customers reduced chance of success. To improve the situation, a detailed, upfront project
involved in public sector IT strategy is required to assess the strategic choices available and make sure that they
projects. We are grateful for still meet the business’ needs over time.
their time and insights into
this market.
• The other major change in project management needed is to take a more modular
approach; structuring the project into manageable chunks with shorter timescales and
quicker deliverables. Such an approach should also involve users early in seeing
what the project is going to deliver.
• It is possible to deliver IT projects successfully in the public sector; the keys to
success lie in combining sensible business and technology strategies within a strong
project management framework and working in a spirit of mutual understanding and
respect.
An independent report by Quocirca Ltd.
www.quocirca.com

Sponsored by InterSystems
1 Introduction
“Glidepath” - a term used in aviation to describe the path taken by an aircraft to its correct landing point as part of its flight plan
when guided by air traffic control and external reference points in difficult conditions even though the destination isn’t clearly
visible.
The government has stated its aim of transforming the business of government through technology 1 and for many years has been
undertaking big IT projects in order to bring about change. However, the similarities between government IT projects and an aircraft
trying to land safely are all too obvious: the customer doesn’t know exactly what this destination point “transformation” looks like,
the suppliers have to find a path through a maze of legacy systems whilst trying to meet the needs of different departments, agencies
and user groups within any given project. The IT industry – the aviation industry of this analogy – needs to find an effective way to
get the customer to his or her destination through this murk. However, using a glidepath also requires discipline and professionalism
on the part of the pilot – the government customer – who must not ignore solid information from safe beacons, even though the
destination is not yet in sight, and must adhere to the flight-plan.
Data and systems need to be right in order to deliver services and monitor performance against target. The National Audit Office
(NAO) has recently found that two thirds of data systems used to measure performance against Public Service Agreements had
problems and 12% of systems were not fit for purpose. (Figure 1).
Figure1: National Audit Office Public Service Agreement Validation Ranges

This kind of independent finding emphasises the pressing need for vendors and system integrators to better work with the public
sector to ensure that their offerings meet the needs of the public sector.
This paper describes some of the challenges faced by government IT both from business and technology perspectives. It aims to
promote debate and point the way to changes which will ensure more government IT projects have cost-effective and safe landings.

2 The public sector delivery challenge


Government spends £14 billion per year on Information Technology – over half of the total UK IT spend. Effectively and efficiently
spending this money poses a number of challenges and we discuss below the general characteristics of government IT projects and
the particular challenge of bringing together legacy IT systems.

Characteristics of government projects


Public sector IT projects have a number of things in common which make them hard to manage and difficult for suppliers to address:
• projects can be huge: Connecting for Health (the recently announced new name for the National Programme for IT
(NPfIT) in England) is a £6 billion project; the overall budget to update the Criminal Justice system is £2 billion; both
stretch over a number of years. Even before projects begin, the procurement cycle is lengthy: 18 months is not untypical.
• much government IT has been in place for many years; hence there are many legacy systems which are now required to be
brought together to provide a ‘joined-up’ experience for citizens, and to deliver the performance reporting required by
different layers of government.

1
“Transformational Government Enabled by Technology” – Cabinet Office November 2005

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• the length and complexity of projects mean that they are frequently subject to change: as well as legislative changes and
government reorganisations, unforeseen events such as terrorist outrages, outbreaks of disease or minor political scandals
can cause changes to requirements which in turn require changes to the IT system under development.
• the nature of public sector IT is changing: away from the old, bespoke “green screen” systems that required armies of
specifically trained staff inputting data from forms supplied by the public, towards interactive web-based services enabling
citizens to enter data directly and receive services or information back from government departments.
• the size of government IT projects means that relatively few suppliers are able to bid for them; in 2005 the Public
Accounts Committee found that 11 suppliers account for 80% of the government IT market. 2 As a consequence, there is a
risk of a lack of innovation due to the inability of small and medium sized firms to bid directly for government business.
• projects are typically delivered by consortia – often working with an already outsourced IT department. This creates a
disconnect between the customer and the project team, increasing the risk of a lack of effective leadership from the public
sector customer and leading to poor project management.
• major IT projects involve a significant element of business process change and this is difficult to manage, especially in the
public sector where staff are often strongly unionised and consultation is expected. Generally, IT organisations are poor at
involving end users in IT development, and this problem is exacerbated in the public sector where many projects have
been undermined by business user lack of acceptance of the delivered applications.
• demands on IT are increasing: centralisation is increasing with a growing need for hierarchical reporting and integration to
deliver performance metrics and reporting. The increasing importance of IT in service delivery means that real time access
to consistent data across a number of agencies and departments is a crucial need.
• data itself is also becoming more complex; for example, the new electronic passports will require two sets of biometrics
per person, each involving multiple data points, while police systems need to cross check DVLA information with
insurance and criminal records.

The challenge of large legacy systems


No IT project can start with a blank canvas; investments have been made over the years and different hardware platforms, operating
systems, databases, applications, reporting systems and management tools exist. The extent of legacy systems is vast: the merger of
Inland Revenue and HM Customs involves over 200 different IT systems, for example. Bringing legacy systems together means
managing issues around different applications and technologies as well as the integrity of the underlying data.
Significant problems have been encountered with data integrity between different systems: The National Audit Office’s audit of the
National Insurance Fund in 2004/05 noted problems with errors in data transferred between the different systems of the Department
for Work and Pensions and the Inland Revenue dating back to 1998 and affecting 25% of the total accounts involved.
Data integrity is complicated by multiple sources of data – the differences between income declared on Inland Revenue forms and
income shown via Pay as You Earn is one example. Multiple databases usually have differences in the way a person is identified -
J Doe may not be picked up as the same as John Doe, Jon Doe or John Dow, even though all other data matches. Redundancy of
data – duplication of the same data in different databases, and/or creating new databases when existing ones could be used - means
more data storage is required, hence increasing costs. This primary data storage then needs to have resilience built in – often through
data mirroring, so creating further redundancy, and this then needs to be archived for audit and compliance reasons. Even in a well
run system, data will appear in many different places – in a complicated environment, there may be 30 or more instances of the same
data – or data that is meant to be the same. Searching through multiple databases is slower, it can miss out on key information and
hence reporting is not optimised. The cost basis is higher than it should be and more resources are required to maintain and manage
data storage systems.
As well as integrating the underlying data, new IT systems also need to bring together the different applications and technologies –
here an understanding of the business processes involved helps identify redundancy of functionality across multiple applications.
The need for horizontal and vertical data interactions (and reporting on these) means that solutions must have the capability to be
interrogated by, or to interrogate, other solutions and databases.
Delivering public sector IT projects is beset with challenges: can technology assist the glidepath to a successful conclusion?

3 The opportunity of changing technology


Government is working with large projects, complex, often bespoke applications, big databases and frequently changing user
requirements. Many of the problems that will be found in public sector IT projects are no different from those found in the private
sector and public sector IT can learn a lot from best practices in the private sector. Public sector technology therefore needs to:

2
Source: Public Accounts Committee Report no 27: “The impact of the Office of Government Commerce’s initiative on the delivery of major IT-
enabled projects” July 2005

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• make the maximum re-use of existing systems and provide a manageable environment in which to keep existing systems
working whilst new applications are developed that are effective and meet the needs of the different stakeholders on the
project;
• be flexible enough to facilitate, not inhibit, change. This means being able to deliver solutions quickly, and more
importantly, easily able to respond to an ever changing environment. It should also be flexible enough to be changed
during the course of the project – let the users see upfront what the new system will look like, enable them to test it –
involve them early on, and also take account of changes to the project scope as it goes through;
• take data from a range of sources and present it consistently, in real time and in a manner that engages the user;
• be simple to use: deliver services that citizens and public sector employees find easy to use and also make new
applications development simple for the IT organisation.
New and emerging technologies can be brought to bear to create a more flexible environment that can increase the capabilities of a
public sector IT environment, and to enable reporting and data transfers to be easily made.
• The use of Service Oriented Architectures (SOAs) provides a flexible base for the future – existing applications can be
“wrappered” as Web Services and made available as functional services in the new environment. New functionality can be
introduced rapidly and at minimum risk. “What ifs?” can be looked at to see if small or large changes are worth carrying
out.
• Virtualisation technologies such as server virtualisation which enables applications to be run across a number of servers as
if a single instance, can make applications more scalable and responsive. Where full virtualisation technology can’t be
implemented, then a means of providing a consolidated view over disparate data sources will be required.
• Workflow and collaborative tools enable teams to exchange information more rapidly and in a controlled, auditable
manner. Business users can make enquiries of existing data without altering the underlying systems and communicate the
results to others, with technology enabling, not constraining, them.
• Portal technology enables users to have their own view on data available so reducing the need for specifically designed
desktops for different job functions and individuals.
• Wireless technologies allow data to be input and read at the point of business need – whether this is within a hospital ward,
for field personnel in social services, for the emergency services on the road or whoever.
Technology does not have to be new to ensure project success; for example, VOSA (the Vehicle and Operator Services Agency – an
executive agency of the Department of Transport) has just introduced computerisation of MOT testing through basic dial-up
connections. Although this project has not been without problems, it has succeeded in developing a system which can be used by a
wide range of users from major dealerships to ‘one man bands’.
Underlying all of this is the need of existing and new IT solutions in the public sector to interoperate both at data and process levels .
Hence, it is necessary to utilise tools that enable not only standard applications, but also the bespoke solutions common in the public
sector, to share information easily, and to enable changes to be carried out as the environment demands.
The technology exists; the question now is: how to manage projects better to leverage it into successful outcomes?

4 How to manage IT projects better


What then might the government and the IT industry do to improve their record in delivering IT applications? There is no getting
away from the fact that much of this work is complex and carries high risk. Such projects require a strong project management
function and the public sector remains poor at this. The National Audit Office found the lack of skills and proven approach to project
as one of its eight common causes of project failure 3 , although measures have been in place to try to improve this for many years.
The public sector has been using the “PRINCE” methodology since the 1990s and the Office for Government Commerce (OGC)
introduced ‘Gateway’ reviews in 2001 to provide an independent view of major IT projects at significant points in the project
lifecycle. However, in 2005 the Public Accounts Committee still found significant weaknesses in the gateway process, with 30% of
projects not undergoing any review at the business case stage. 4
Together with poor project management goes an inability to take on or manage risk. Recent government IT programmes have
transferred more of the project risk to suppliers: the current National Health programme is an example. Such an approach might
work in the short term and get the project delivered, but at a cost. There is no point in driving suppliers to the point of extinction as
this risks non-delivery of the project altogether. Transferring risk increases cost: the more money the supplier has to put in the
budget to manage risk, the more the project will cost – and all suppliers will need to do the same - particularly in an environment
where probability of change is high and the number of suppliers is already limited. An environment where the customer does nothing

3
See: Parliamentary Office of Science and Technology: Government IT projects July 2003
4
Source: Public Accounts Committee Report no 27: “The impact of the Office of Government Commerce’s initiative on the delivery of major IT-
enabled projects” July 2005

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to manage risk and expects the supply side to cope with the majority of project risk is one where the ‘blame culture’ will flourish –
emphatically not one where partnership will deliver results.
One way of reducing risk is to take a more modular approach. This would involve setting up smaller projects: for example, instead of
letting a large single contract to “transform” its IT, public sector organisations could think more strategically about what they want
to achieve in business terms and break this down into smaller projects. This would have the advantage of involving the organisation
more deeply in thinking about business change as well as enabling more suppliers to enter the market with the potential to increase
innovation and value for money. While advocating this view, Quocirca is not advocating that all public sector projects be carried out
as small, independent projects – oversight is still required to ensure that all small projects are aiming towards a common end point.
However, the likelihood of smaller, discrete projects being successful or of being able to be stopped without impacting the overall
end result, is higher – and value can be seen to be provided from a much earlier stage.
Given the problems the government is experiencing in managing its big IT projects, what else might we suggest to improve its
success rate?
Quocirca suggests that there are three pillars for success in government IT:
• business needs
• technology choice
• project management.
The business needs are the over-riding concern – technology is a mere facilitator. As previously stated, it is unlikely that a public
sector IT project will start from a blank canvas, and so there will be a need to deal both with existing systems and also data stores.
Therefore, the technology choice will be influenced by existing parameters and constraints – and all of these parameters and
constraints need to be tightly controlled via first-rate project management.
The business needs and technology choice need to come together in an overall project strategy: all three pillars need to be fully
understood by the government customer and all the IT practitioners involved. The business needs must be fully addressed at all
stages of the project.
As far as the business needs are concerned, then there are a number of key issues to take into account:
• the customer must have a clear vision of where they want to be
• the vision must encompass the benefits to the citizen of the changes proposed
• there must be clear business ownership of the vision
• the project objectives must be tightly drawn and any “scope creep” avoided without a solid business justification and
full project risk analysis.
It is almost inevitable that changes will occur as the project progresses; what is vital is that any proposed changes are considered
relative to the overall vision and objectives of the project by the business owner. Here, the concept of “Senior Responsible Owner”
(SRO) introduced by the OGC and Intellect, the UK IT trade body, is making a good start at recognising the value of strong business
ownership of the project, but needs to be translated into real commitment and leadership on the ground.
Critical success factors in the choice of technology solution include:
• it must enable the re-use of as many existing systems as possible
• it must be able to provide a flexible platform for future development
• the chosen solution must be scaleable to take account of changing business needs
• data integrity is absolutely paramount; the solution should be able to help manage and overcome the data integrity
problems inherent in government IT
• data transparency is also important – data collected and stored must be easily accessible by other systems, and must be
capable of being exchanged not just across applications within the department concerned, but across departmental
boundaries and up and down the governmental reporting chains..
As far as technology is concerned, the customer must be able to talk as equals to the industry. Again, the government has begun to
make some progress here. It has recognised that the IT function needs to improve its professionalism, and the introduction of the
“Senior Responsible Industry Executive” (SRIE) to provide governance within the supplier’s project team and work with the SRO
should enable better communication at senior levels between customer and supplier.
Within project management, the following are key:
• the project strategy must be a partnership between customer and supplier; both must appreciate and share the risks
• change management is vital; it must be viewed from the point of view of risk management – the risk to the overall project
deadlines, costs and resources, the risk to any associated projects and the risk to providing an adequate solution to the
problem at the time of delivery – not the time of initial project scope.

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• the project must maximise end user acceptance by involving them and also by delivering quick wins
Getting the basic outline, requirements and management of a project right at the start saves time, money and wasted effort later, and
a common understanding between the customer and supplier is vital. Key issues to be agreed at “Stage 0” of any project include:
• business benefits: what is the project aiming to deliver? why are we doing this? how will we know that we have
succeeded? what will happen if the project does not deliver?
• what are the risks to the project? who owns them and how are they to be managed?
• how are we undertaking this project?
o what are our project structures, business and operational owners, supplier owners, technology choices and key
milestones?
o how are we involving users?
o how are we managing the final change management procedures – the training and acceptance measuring of the
constituent users?

5 Conclusion
It is possible to get IT right in the public sector. Online tax returns are now much easier to use and gaining in popularity, much of the
public sector is web-enabled in some way and lessons are being learnt to deliver citizen-centric services. Much good work has been
done by organisations such as the Office of Government Commerce and Intellect in order to improve project management in the
public sector. The concept of Gateway reviews is good, as is that of SRO and SRIE discussed earlier. What is required now is for IT
practitioners in the public sector to insist that these functions are in place – and that adequate resources are provided and are fully
utilised. Whilst many government projects are challenging, proven and readily available technologies exist to deliver flexible
platforms for future growth.
Government needs to take a closer look at how it delivers beneficial change through IT. It should continue to improve the
professionalism of its IT function, gain greater understanding of technology developments and consider the benefits of a move from
big one-piece projects to modular ones. This would lead to better business ownership and potentially quicker delivery of benefits to
all stakeholders – including citizens and business users. The lowering of the initial costs of bidding for modular projects would also
enable more competitive tenders and increase the chances of success for all stakeholders.
Once projects are under way, successful IT project management involves discipline from the customer and the supplier:
• a commitment from suppliers to deliver the most cost-effective solution, re-using existing solutions where possible and a
strict adherence to project management disciplines. However, the public sector must get further away from the perception
that “cost-effective” = “lowest bid cost”. “Cost-effective” must look to the long term – solutions will need to face the
problems of the public sector in 5 and 10 years’ time – after general elections, departmental changes, and even with
possible further centralisation requirements from the EU. Long term considerations must also look at costs across the
whole life of the system: what happens when technology changes? when new software releases are made available? what
are the costs involved in upgrading other hardware and software to accommodate changes in one part of the application?
how easy will it be to upgrade the system? what impact will it have on staff? what are our costs in managing the contract
over time?
• a commitment from the customer that it owns the business strategy and will define clear objectives for the project,
recognising that change and risk are inevitable and that it must take responsibility for its part in those changes and risks.
The government published its “Transformational” strategy in November 2005, but no-one really knows what this ‘transformed’
government will look like and the public sector is still struggling to successfully manage big IT projects. In the private sector, there
is better understanding of “what is adequate and fit for purpose = job done”. In the public sector, it seems as if everything must be
perfect. When a major government IT project has an enquiry, it means that the whole credibility of government IT is at stake, but if a
small amount of the effort spent on enquiring into failed IT projects could be committed up-front to improve the procurement and
management of future systems, the extent of failure could be significantly reduced.
Getting Public Sector IT projects wrong can be disastrous. Getting it right can be done, but success, as in the glidepath analogy used
earlier, requires discipline from both the pilot (the government customer) and the industry to achieve a safe landing. It requires better
management and closer co-operation between the customer and supplier as we outline in this paper.

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About InterSystems
InterSystems is a technology innovation leader in database and integration software. For over 25 years InterSystems
technologies have enabled solutions to business problems, delivering solutions with the utmost scalability, flexibility
and ease of use ensuring evolution with the organisation with the minimal upheaval and ongoing maintenance
overhead. InterSystems technology enriches both existing and new applications by rapidly connecting systems,
processes and people. Creating this ‘connected organisation’ enables people to quickly and easily make real-time,
informed business decisions.
Major organisations around the world are realising the benefits of InterSystems-enriched applications, consolidating
disparate silos of data for an easy to query, real-time, view of the enterprise. These organisations span a variety of
market sectors, from finance to telecoms, logistics to retail. InterSystems is a major global player in wide variety of
healthcare applications, and plays a vital role in the electronic patient record, laboratory and pharmacy arenas.
Caché is a high-performance database with simultaneous object, SQL and multidimensional access, Ensemble is a
unified application integration platform with built-in persistence. These technologies provide rapid delivery of reliable
service-oriented-applications and web services for complex business process management, workflow, data
consolidation, quality and real-time analytics.
InterSystems solve the problems of managing the increasing volume and variation in the kinds of data that people need,
the way it is connected, stored and provided. A data engine stores and distributes the data in its most efficient manner,
and an integrated application layer presents both data and applications to the user in the form that they require. This
ensures that less data needs to be captured, duplicated, and managed.
This proven approach increases the ‘utility’ of the data in a manner that does not interfere with the initial application,
so reducing costs and risks of changing existing applications. More data can be shared more easily between
applications and departments, enabling them to have more integrated view of their customer data. This can be achieved
across several different kinds of applications and even different computers to create a homogenous ‘virtual database’
from multiple applications.
InterSystems integrated software architecture delivers industry leading levels of performance, reliability, and scalability
from one to many tens of thousands of simultaneous users – all on modest computing platforms. By separating the
physical storage of information from its logical presentation we enable application developers to continuously innovate
using the latest technologies, without rewriting existing business logic or reformatting the data. This helps insulate end-
users from the continual upheaval of technology refreshes, and yet they can also receive applications that meet their
changing needs. InterSystems is helping companies solve today’s problems while also meeting tomorrow’s needs, by
enabling developers to build applications tailored to customers requirements that can evolve with minimal ongoing
maintenance overhead.
By working with InterSystems and its partners organizations will:
• Immediately realise significant cost savings by leveraging current investment in applications
• Increase efficiency by providing high-performance access to vital information, and consolidated business
processes across the entire enterprise, including customers and suppliers
• Respond to business requirements with continuous quality improvement from real-time business analytics
• Quickly make business aligned IT visions a reality.
With headquarters in Cambridge, Massachusetts, InterSystems has offices in over 20 countries serving more than four
million users around the world.

Contact:
InterSystems
Tangier Lane
Eton, Windsor
Berks SL4 6BB
Tel: 01753 855450
www.InterSystems.co.uk/govt

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About Quocirca
Quocirca is a perceptional research and analysis company with a focus on the European market for information
technology and communications (ITC). Its analyst team is made up of real-world practitioners with first hand
experience of ITC delivery who continuously research and track the industry in the following key areas:
• Business Process Evolution and Enablement
• Enterprise Applications and Integration
• Communications, Collaboration and Mobility
• Infrastructure and IT Systems Management
• Utility Computing and Delivery of IT as a Service
• IT Delivery Channels and Practices
• IT Investment Activity, Behaviour and Planning
Quocirca research is always pragmatic, business orientated and conducted in the context of the bigger picture. ITC has
the ability to transform businesses and the processes that drive them, but often fails to do so. Quocirca’s mission is to
help organisations improve their success rate.
Quocirca has a pro-active primary research programme, regularly polling users, purchasers and resellers of ITC
products and services on the issues of the day. Over time, Quocirca has built a picture of long term investment trends,
providing invaluable information for the whole of the ITC community.
Quocirca works with global and local providers of ITC products and services to help them deliver on the promise that
ITC holds for business. Quocirca’s clients include Oracle, Microsoft, IBM, Dell and Cisco, along with other large
vendors, service providers and more specialist firms. Sponsorship of specific studies by such organisations allows
much of Quocirca’s research to be placed into the public domain. Quocirca’s independent culture and the real-world
experience of Quocirca’s analysts, however, ensure that the research and analysis is always objective, accurate,
actionable and challenging.
Quocirca reports are freely available to everyone and may be requested via www.quocirca.com.
Contact:
Quocirca Ltd
Mountbatten House
Fairacres
Windsor
Berkshire
SL4 4LE
United Kingdom
Tel +44 1753 754 838

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