Government aims to save £75m in Microsoft deal

The British government has signed a government-wide deal to buy Microsoft software, following 18 months of wrangling.

The deal would...

The British government has signed a government-wide deal to buy Microsoft software, following 18 months of wrangling.

The deal would save the public sector £75m over five years, said OGC Buying Solutions, the Treasury agency that negotiated the deal.

Angela Eagle, exchequer secretary to the Treasury, said the agreement allowed public bodies to re-use old software licences, which "reinforces the government's commitment to its Open Source Action Plan".

She said the arrangement included free training, as did the last deal, and licence terms that allowed government users to only pay for those components of Microsoft's usual software bundles that they wanted to use.

Eagle did not say whether these benefits contributed to the £75m saving, nor how much of it was directly attributable to price discounts.

Sources close to the deal said that the two sides had been locked over the bulk buying discount because Microsoft wanted to make it on a government commitment to buy certain volumes of its software.

Previous agreements ran for three years instead of the new deal's five. But public bodies' buying cycles were typically longer and this was thought to put undue pressure on them to upgrade.

The first such aggregated buying deal struck between the Office of Government Commerce and Microsoft in 2002 was said by Microsoft to save £100m over three years, £74m of which was attributed to productivity savings.

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