DIA estimates savings of up to 55 percent on Microsoft deal

DIA negotiates agreement for desktop and office productivity software

UPDATE - June 12

Department of Internal Affairs estimates savings of up to 55 percent, following a deal with Microsoft.

The expected volume of need without special negotiation was quantified at $215 million, so the $119 million upper limit on the expected cost reduction would represent a 55 percent saving, says DIA spokesperson Victoria Dew.

The terms of the Microsoft contract are open to a wide range of agencies including local government, says DIA. "The few Government entities that are not included are either commercial entities (such as most state-owned enterprises), or have alternative sector arrangements (such as schools)."

Twenty-nine agencies or local authorities are in current agreements that expire on June 30 this year and a further 94 are in agreements that expire on September 30.

Original story

Government has concluded a multi-agency agreement with Microsoft, giving government agencies favourable pricing on software licences.

The agreement is similar to those that used to be concluded between the parties every three years since 2000 – which were denoted by the year-number prefixed by “G” - until 2009, when what was to have been the G2009 agreement could not be successfully negotiated. Microsoft then undertook to give "recommended retail price certainty" to agencies as a basis for their individual negotiations.

Internal Affairs Minister Chris Tremain announced on Friday that the Department of Internal Affairs has signed a three-year agreement with Microsoft which he says “will reduce future licensing costs by up to $119 million.”

The agreement, negotiated by the DIA, will provide a range of products to government agencies on desktop and office productivity software like Windows and Office, and enterprise software like Windows Server, Exchange and SQL Server database.

“This agreement offers a significant improvement on previous all-of-government Microsoft contracts. For example, it offers new and innovative licensing models based on the number of users, rather than the number of devices being licensed,” says Tremain.

“Agencies can also take advantage of subscription-based licensing which, through annualised reviews, offers greater flexibility at lower cost compared to traditional licensing models,” he says.

The agreement includes a cloud-computing component. “Under this framework Microsoft will enable the government to transition seamlessly between on-premise, private and public cloud-computing models, as well as support the greater use of smartphones and slates,” says a Microsoft statement.

“The framework includes enhanced privacy and security terms based on stringent European Data Protection requirements that will serve to protect government use of Microsoft cloud services,” it adds.

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Tags MicrosoftDepartment of Internal Affairs




This "giving government agencies favourable pricing on software licences" is an interesting statement. Without the pricing details one cannot verify the claim. Indeed, for most of the technologies mentioned one can only assume the Government has entered into an anti-competitive deal.

As far as "future savings" goes...Microsoft announced a massive retail price hike in the UK. The excuse being that they needed to align pricing with European rates. However, the deal they did with the UK Government is claimed to "only" be a hike of around 1%. That would be a "future saving" but the reality is that the price is still going up.

There should be great concern about the continuing lack of transparency around this deal, particularly in an age of austerity and at a time when the Prime Minister is bemoaning the Government's capture by legacy applications.



"My capacity for happiness," he added, "you could fit into a matchbox without taking out the matches first"



See this as a good thing , provides a common platform for all of government, its no just the cost offie but other product. It would potentially cost more in re-enginering current platforms e.g web server, sqlservers etc if you move to a competing product



I'm interested to see what this "framework" that Microsoft is touting will actually leverage... MSNZ do not currently have a public cloud in NZ - and there are only a couple of Private clouds that are capable of working well with the MS stack - are MSNZ planning on bringing a datacentre here? or are they lobbying the DIA/IRD to relax the current data sovereignty laws?



Good to see the anti-Microsoft movement is alive and well.

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