EU keeps schtum on Microsoft prices

The reason Microsoft’s EU numbers don’t add up is that the EC has spent only half the total amount it had alloted under its €49m contract for desktop software.

When on signing the contract in 2008 the EC estimated its cost per user per year would be €125, it fell well short of the total contract value. It sounds like a super deal when you say it’s a third cheaper than it is.

It better had sound like a super deal as well if the EC wants to justify spending millions on Microsoft software while still fighting the software giant in court over its monopoly abuses.

But the EC has told us its estimate proved roughly accurate:

“The Commission can confirm that the amount of 125 € given in its reply to Parliamentary Question E-1533/2008 is an accurate estimate of the net price paid per year and per end user for the use of the Microsoft products pertaining to the Commission’s office automation environment (client and server),” the Commission said in a statement.

The EC has simply not taken out the option to spend the full €187.50 per user it could under the contract.

We may still be unable to determine whether it was a good deal. The EC has not reported what it actually cost to put Microsoft software on its 36,000 desktops. Nor what it actually got. Indeed, it won’t:

“For confidentiality reasons, the Commission cannot give further details about the composition of this price.”

The irony is, there is no competition that could justify any confidentiality over the Microsoft contract. The only alternatives are free, since offering free software is about as much hope as anyone would have of breaking a monopolist’s hold over even those institutions that prosecute it for operating a monopoly. 

Good deal, non?

It’s still useful to know whether it was a good deal. But only inadequate assessments can be made using the inadequate information the EC has supplied.

That inadequacy extends to the EC’s own assessment of the deal. The Commission told MEPs in 2008 that if they wanted to see how good the €125 unit price was, they should compare it to the the €226 it was paying for Microsoft software in 2003.

Good deal, non? The EC claimed so. It was a “significant decrease”, it told MEPs keen to know why the EC wasn’t using open source software instead. It was in fact almost half price.

But the reason may not have been because it had got a half price deal from Microsoft. It’s €125 price was a full third cheaper than it might of been merely because the EC didn’t take up its full contract option.

Whether this was a good deal in comparison to the €226 the EC was paying in 2003 could only be judged if the EC said what options were taken up under each contract. We would assume this derives from what Microsoft products the EC chose to put on everyone’s desktop. You would need to spell this out to make a meaningful comparison between the 2003 and 2008 costs.


But the EC won’t say because it’s “confidential”. Confidential, that is, to those European citizens who put up the money for this Microsoft contract. Not confidential to Microsoft, Fujitsu or the Commission.

And that’s only half the story too. Because the Fujitsu contract terms were determined at least in part by an Interinstitutional Licensing Agreement (ILA) the EC signed with Microsoft Ireland on behalf of itself and 37 other EU agencies on 22 May 2007.

The EC said this agreement is confidential as well. As also is the Framework contract it struck with Microsoft SA/NV (Belgium) on 31 May 2007 for “the provision of high-level services related to the use of products acquired under the ILA”.

They were both up for renewal this year. Their reinstitution would be required for the Fujitsu contract to be passed for renewal in February as well. More details are necessary for us to determine if this is a good idea.