The Sherlock Holmes story Silver Blaze is about the disappearance of a highly rated racehorse on the eve of an important race and the apparent murder of its trainer.

The Scotland Yard detective in charge of the case asks Holmes: “Is there any other point to which you would wish to draw my attention?”, and Holmes replies: “To the curious incident of the dog in the night-time”.

The Inspector observes: “The dog did nothing in the night-time”.

“That was the curious incident,” says Holmes.

I was put in mind of this story before Christmas when I met Steve Palmer, a senior director of the London Borough of Hillingdon, when he and I were recording a webinar on operational efficiency in government.

He briefed me on the borough’s imminent move to Google Apps, reckoning that it should deliver annual savings upwards of £600,000.

The formal announcement on December 19th states that the Council had approved plans to shift its 3500 staff to web-based working with Google, at a savings of nearly £3m over four years — closer to an annual £750,000.

Big money.

The announcement coincided with another round of debate between the Commons Public Administration Select Committee (PASC) and the government around a follow-through to the PASC July 2011 report Government and IT — “a recipe for rip-offs”: time for a new approach.

One particular focus of the report was concern at the very clear oligopoly present in the provision of IT services to HM Government.

There was serious debate around the issue of whether there was in fact a cartel at work but once the dust settled, no further enquiry along such lines is now proposed.

That there is an oligopoly is not in doubt.

One key aspect of this debate has been missed.

PASC might ask at this point: “Is there any other point to which you would wish to draw our attention?”, and I would reply, “To the curious incident of Hillingdon moving to Google”.

The PASC observes “But Google is much cheaper”.

“That is the curious incident”, says Super Sleuth Sykes.

Of course Google is much cheaper.

It delivers the Google Apps from a highly automated server complex that I call a services factory.

This gives it the services production economics to sharply undercut the competing offers from the oligopoly.

The curious incident is that the oligopoly have also long operated server complexes, but have failed to innovate the highly automated virtualised operational model that the likes of Google and Amazon are now exploiting.

Late in the day, the oligopoly are now moving to copy, and their marketing folk are claiming great prowess in the cloud.

But the fundamental question remains: why did it take the likes of Google and Amazon to break the mould?

In my October 2011 column I drew an analogy between the 20p Weetabix breakfast (the product of a highly automated industry) and breakfast at the Wolseley (a highly people-intensive exercise) which is 100 times more expensive.

The curious incident is that the oligopoly stuck firm to the Wolseley model and left it to the Googles of the world to bring the Weetabix business model into play.

Hillingdon has gone Weetabix, while the vast swathe of central government, and all the other London boroughs, are still breakfasting at the Wolseley — and at our expense.

I was once challenged to explain why Google and Amazon started in consumer markets (search and e-commerce) rather than in the enterprise space.

I was clear in my reply: the consumer has no legacy systems and no IT department, two major barriers to change.

For however much the IT professional is projected as the innovator, in practice the instinctive focus is on job protection.

The Weetabix model takes a lot of IT jobs out of the supply side (the highly automated service factory) and also out of the last mile of the consumption side — the requirement for IT staff at Hillingdon to manage the use of Google Apps in the cloud will be much reduced.

So I suggest there has been a cosy coincidence of interests between the oligopoly and the IT function, whether in government or in the private sector, for far too long.

The oligopoly had all the technological skills to create the highly automated service factory well ahead of Google and Amazon and did not — and the wider IT function never pressed them to so do.

Why, to paraphrase Sherlock Holmes once more, did the dog do nothing in the night-time? Because it was just too comfortable with the status quo.