Health Ministry declares a win vs Microsoft

Ministry pays more for licences, but claims process savings

The Health Ministry is claiming big wins in its sector-wide software licensing agreement with Microsoft, despite a price increase by the proprietary software giant.

Ministry technology manager Alan Hesketh says the agreement secures licences for a range of Microsoft software, including desktop, database and web server software, for the ministry, New Zealand's 21 district health boards, ACC and the New Zealand Blood Service.

The ministry led the negotiations on behalf of the health sector with Microsoft, after the company and the State Services Commission failed to renew a three-year government-wide agreement, leaving departments to secure their own deals.

Hesketh says the health sector is paying slightly more for software licences under the new three-year agreement.

Microsoft had not been prepared to move on its price increases and this was the reason for the breakdown of the government-wide agreement.

"We got the best possible deal out of Microsoft we could have got at this time."

The sector has saved money by negotiating as a whole, he says.

Each organisation would have had to "go through their own legal process of vetting the agreement and doing the negotiation process. We did that once rather than 24 times".

The agreement is also flexible, allowing licences to be transferred between the participating health sector agencies at no extra cost should they be reformed or reconfigured.

The commission has encouraged government agencies to investigate alternatives to Microsoft products, including open-source software, but this was not an option for the sector as Microsoft is heavily embedded in its infrastructure, says Mr Hesketh.

The ministry is investigating open-source solutions with Internal Affairs, he says.

New Zealand Open Source Society president Don Christie says the Health Ministry, like many departments, is in a difficult position because Microsoft is so entrenched.

But this will not change until alternative solutions are explored and adopted. "They haven't gone through to tender, they haven't gone through the investigative process. It doesn't leave them in a better situation."

Government agencies and state-owned organisations spent $1.9 billion on information and communications technology in the year ending June 30, 2008, according to a survey by the commission. Microsoft was their biggest software supplier. The Health Ministry is claiming big wins in its sector-wide software licensing agreement with Microsoft, despite a price increase by the proprietary software giant.

Ministry technology manager Alan Hesketh says the agreement secures licences for a range of Microsoft software, including desktop, database and web server software, for the ministry, New Zealand's 21 district health boards, ACC and the New Zealand Blood Service.

The ministry led the negotiations on behalf of the health sector with Microsoft, after the company and the State Services Commission failed to renew a three-year government-wide agreement, leaving departments to secure their own deals.

Hesketh says the health sector is paying slightly more for software licences under the new three-year agreement.

Microsoft had not been prepared to move on its price increases and this was the reason for the breakdown of the government-wide agreement.

"We got the best possible deal out of Microsoft we could have got at this time."

The sector has saved money by negotiating as a whole, he says.

Each organisation would have had to "go through their own legal process of vetting the agreement and doing the negotiation process. We did that once rather than 24 times".

The agreement is also flexible, allowing licences to be transferred between the participating health sector agencies at no extra cost should they be reformed or reconfigured.

The commission has encouraged government agencies to investigate alternatives to Microsoft products, including open-source software, but this was not an option for the sector as Microsoft is heavily embedded in its infrastructure, says Mr Hesketh.

The ministry is investigating open-source solutions with Internal Affairs, he says.

New Zealand Open Source Society president Don Christie says the Health Ministry, like many departments, is in a difficult position because Microsoft is so entrenched.

But this will not change until alternative solutions are explored and adopted. "They haven't gone through to tender, they haven't gone through the investigative process. It doesn't leave them in a better situation."

Government agencies and state-owned organisations spent $1.9 billion on information and communications technology in the year ending June 30, 2008, according to a survey by the commission. Microsoft was their biggest software supplier.

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