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IT Department Collaboration: Cabinet Office and Capita Enter Partnership to Increase ITIL Royalties

Government and outsourcing company Capita have established a collaborative endeavor, which will assume management of the UK government's collection of exemplary practice frameworks.

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IT Department Offices Collaborate with Capita for Enhanced ITIL Revenue Generation
IT Department Offices Collaborate with Capita for Enhanced ITIL Revenue Generation

IT Department Collaboration: Cabinet Office and Capita Enter Partnership to Increase ITIL Royalties

Government Forms Joint Venture with Capita to Manage IT Best Practices Portfolio

The UK government and outsourcing provider Capita have announced a new joint venture to manage the government's best practice framework portfolio, which includes ITIL and Prince2. The joint venture, named AXELOS Ltd., will be 51% owned by Capita.

The deal, brokered by the Cabinet Office's Commercial Models Team, marks the first joint venture of this kind to be spun out of central government. 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. At the moment, the government earns around £80 million a year in royalty revenues from the portfolio, and the Cabinet Office projects that the combination of guaranteed payments, preferred payments, and dividends could amount to £311m over ten years.

Capita's strategy is to broaden the range of training products and markets to sell into, across the UK and worldwide. The company plans to digitize services and introduce experiential learning methods such as gaming and simulation to make learning more engaging and effective.

The new company aims to further enhance the international recognition of ITIL by taking it to new markets and establishing it as the global industry standard. IT professionals who are qualified in ITIL should notice no difference immediately, according to the Cabinet Office. However, Stephen Mann, an IT service management analyst for Forrester Research, questions the future of the ITIL framework, asking if it will be written by Capita. Mann believes the joint venture may hurt the ability for ITIL to evolve into the support mechanism the industry really needs.

Mann wonders if those who have invested time into creating and enhancing ITIL will still volunteer their services to bring it up to speed with modern IT service delivery needs. The new company will invest in product development to ensure ITIL stays at the cutting edge and improve the offer to IT professionals.

Both ITIL and PRINCE2 were developed by the government's Central Computer and Telecommunications Agency in the late 1980s. The Office of Government Commerce later absorbed the Central Computer and Telecommunications Agency. Capita won the contract following a competitive tender. The government's equity value in the portfolio is around £100 million, and the value of the government's 49% could be worth as much as £362m.

The new joint venture will take over the UK government's best practice framework portfolio, which includes ITIL and Prince2. Capita's involvement in the joint venture raises questions about the future direction of the ITIL framework and whether it will continue to evolve to meet the needs of the industry. However, the Cabinet Office stated that it remains committed to ensuring that ITIL remains a valuable resource for IT professionals and continues to be a global industry standard.

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