Govt has two-year grace on MS fees

The government is immune to a potentially massive Microsoft licence fee increase other customers will face on February 28 next year. That's because its G2000 Preferential Select licensing agreement has two years left to run.

The government is immune to a potentially massive Microsoft licence fee increase other customers will face on February 28 next year. That’s because its G2000 Preferential Select licensing agreement has two years left to run.

The UK government, in contrast, may stop using Microsoft software because of a possible licence fee increase of between 50% and 200%.

Ministry of Social Development IT director Neil Miranda led a four-person team that negotiated our government’s four-year deal with Microsoft, which covers about 80 state agencies.

“Two years ago when it was time to renegotiate Microsoft licences for government departments, [then head of Social Welfare] Margaret Bazley said she wasn’t happy with what Microsoft was proposing,” says Miranda. “We found that most other government departments weren’t happy either and came together as one team.”

The team of negotiators also included Brendan Kelly from the State Services Commission and IT managers from IRD and Statistics New Zealand. The two-month negotiations led to a four-year agreement. Miranda says Microsoft has told government departments that its new licensing scheme won’t affect the current agreement.

Microsoft, feeling the heat of customer complaints, has twice extended the deadline for organisations to enrol in the new programme for licensing and upgrading software.

The UK Office of the Government Commerce (OGC) is in talks with Microsoft over a single contract to supply its Office and Windows software to the country’s 497,600 public servants. The UK government spends about £120 million ($US169 million) a year on the direct purchase of Microsoft products, and believes the increased licensing fees would add up to £60 million a year to the bill, says OGC spokesman Martin Day.

Though Day would not comment on progress in talks between the UK government and Microsoft, he says one of the possible steps the government could take is to look elsewhere for its software needs.

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