The Channel logo

News

By | Paul Kunert 31st May 2012 12:48

UK.gov beats down Microsoft software price hike to 1pc

Redmond and Cabinet Office ink 3-year deal

Government bodies and agencies will pay 1 per cent more for Microsoft volume licences from 1 July under the newly penned Public Sector Agreement (PSA) 12, The Register can reveal.

This compares to the massive 29 per cent average upswing in prices that is expected to hit commercial organisations in the UK when Microsoft aligns pricing across the EU to the euro.

A spokeswoman for the Cabinet Office said: “We can confirm that Microsoft and Cabinet Office have signed a new three-year licensing framework for all eligible UK public sector organisations.

"The framework fully supports the government’s goals of reducing expenditure while at the same time transforming public services through the adoption of new technologies," the mouthpiece added.

The outcome will not surprise regular Reg readers as early last month sources revealed that Microsoft Large Account Reseller boss Edward Hyde had told them on a conference call that the government would not feel the squeeze of the hike.

The Cabinet Office voice box refused to comment on the financial details of PSA12 at this point.

But sources familiar with the talks said that Cabinet Office Minister Francis Maude and his Efficiency Reform Group had "hammered Microsoft to get what they wanted and [Microsoft] conceded a 1 per cent rise".

The tacit threat of another moratorium on Microsoft - last year the Cabinet Office halted all but emergency software procurement with the vendor as it negotiated better Ts&Cs - was enough to force the firm to capitulate.

The spending freeze was finally lifted in December, when the Cabinet Office negotiated a temporary deal with Microsoft.

Suppliers accredited on the Commodity IT Hardware and Software framework can supply public sector organisations with the volume licences until next April, when a new agreement is likely to be negotiated.

A Microsoft spokeswoman rattled out the same quote as the Cabinet Office but when responding to questions about the deal's financial details said: "That information is confidential."

She added: "What I can tell you is that we have negotiated a framework that offers substantial savings to the public sector, in support of the UK government's goal of reducing the deficit." ®

comment icon Read 20 comments on this article alert Send corrections

Opinion

Alexandre Mesguich

Change is order of day as tech giants shift strategy gears
Partnership

Frank Jennings

Confused? No problem, we have 5, no 6, no 7... lots of standards

Chris Mellor

VC sequence could end not with a bang, but a whimper
Sad man stares glumly over boxed contents of desk. Image via shutterstock (Baranq)

Features

money trap conceptual illustration
Big boys snare the unwary with too-good-to-be-true deals
Angus Highland cow
Pet carriers not wanted for whitebox stampede
FBcoldstoragearray
Sorry OpenStack and Open Compute, we're not all Facebook
Gary Kovacs, CEO of AVG. Pic: World Economic Forum
Scammy download sites? Government snooping? Run of the mill for Gary Kovacs