IT Department Government Agency and Private Firm Combine Resources to Bolster ITIL Revenue Streams

Capita and the Cabinet Office Form New Joint Venture for IT Best Practice Frameworks

In a significant move, the Cabinet Office and outsourcing provider Capita have announced the formation of a new joint venture. This marks the first joint venture of its kind to be spun out of central government, brokered by the Cabinet Office's Commercial Models Team.

The new company will take over the UK government's best practice framework portfolio, which includes ITIL and Prince2. Capita won the contract following a competitive tender. The joint venture will be 51% owned by Capita, with the government holding the remaining 49%.

Capita will pay the government £10 million up front for its stake in the joint venture, and an ongoing annual payment of £9.4 million. The government's equity value in the portfolio is around £100 million.

The new joint venture aims to broaden the range of training products and markets to sell into, across the UK and worldwide. Capita plans to digitize services for the joint venture and introduce experiential learning methods such as gaming and simulation. The company also plans to invest in product development to keep ITIL at the cutting edge.

However, Stephen Mann, an IT service management analyst, questions the future of the ITIL framework. Mann suggests that the joint venture may hurt the ability for ITIL to evolve into the support mechanism the industry needs. He wonders if ITIL will be written by Capita in the future.

At the moment, the government earns around £80 million a year in royalty revenues from the portfolio. AXELOS will have the future rights to collect royalties for training preparations related to the IT Best Practice frameworks ITIL and Prince2. The Cabinet Office projects that the combination of guaranteed payments, preferred payments, and dividends could amount to £311m over ten years.

The Cabinet Office states that IT professionals who are qualified in ITIL should notice no difference immediately. However, Mann questions if those who have previously invested time in creating and enhancing ITIL will continue to do so. He also questions if the joint venture may limit the ability for ITIL to adapt to the changing needs of the industry.

The new company aims to further enhance the international recognition of ITIL. With Capita's strategic approach and investment in product development, the joint venture could bring significant changes to the ITIL framework and the industry as a whole.

In conclusion, the formation of this joint venture marks a significant step forward for the UK government and Capita. The joint venture will bring about changes to the ITIL framework, and it will be interesting to see how the industry adapts to these changes in the coming years.

IT Department Government Agency and Private Firm Combine Resources to Bolster ITIL Revenue Streams