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NHS deal with Microsoft to save health service up to £330m

Lindsay Clark

The NHS has announced a new software licensing deal with Microsoft that promises substantial savings and the development of software specially adapted for the health service's needs.

Health Minister John Hutton today said the agreement on the licensing of Microsoft's desktop and mobile computing software could save the NHS £112m over the next three years and in excess of £330m over the lifetime of the contract.

It allows the NHS to use Microsoft desktop software on up to 900,000 computers, compared with 500,000 covered by the previous agreement, and covers NHS and Department of Health users across the country.

The deal was signed a week after the Office of Government Commerce reported that open source software was now a viable alternative to proprietary software products.

The Microsoft deal is structured to run for a nine year period subject to three-year break points allowing for renegotiation should costs reduce or circumstances change.

Richard Granger, director general NHS IT said, "The NHS currently the largest procurer of IT services in the world. This agreement illustrates Microsoft's commitment to supporting the needs and demands of one of its most important customers.

"It represents not only substantial savings over both previous NHS pricing but also that of other public sector purchasers. Extremely favourable terms and conditions for the NHS have been secured."

Microsoft's commitment to £40m of research and development under this agreement will result in guidelines and toolkits to allow independent software vendors to deliver an NHS-specific user interface, Granger said.


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