NHS-Microsoft deal rattles IT managers

Anxious NHS IT Managers and software contract experts have expressed concern at the impact of the National Health Service's...

Anxious NHS IT Managers and software contract experts have expressed concern at the impact of the National Health Service's decision to sign a three-year software subscription contract with Microsoft.

The deal, which means the NHS will not own the software it uses, has caused tension between users and the NHS Purchasing and Supply Agency (PASA) which is overseeing the arrangement.

Officials at NHS PASA have confirmed that the first year of the deal will be funded by central capital money, but years two and three will be "top-sliced" from trusts' computer budgets. There are no details about how much will be taken from managers' budgets in future years, but officials said it would be less than they currently spend on Microsoft licences.

However, one IT manager in an NHS trust said, "The deal puts pressure on NHS organisations to find money that they don't have."

Andrew Rudd, purchasing executive at NHS PASA said, "They will be better off with this because it will free up money that was previously allocated to software."

The deal, which is unprecedented in the UK public sector, could tie organisations to Microsoft and present huge logistical difficulties when the licence expires at the end of the term, according to users. One NHS IT professional said, "At the end of the deal we will effectively have nothing."

Under the terms of the agreement Microsoft will retain ownership of software used by NHS staff. At the end of the deal, the NHS will have to agree a new subscription package with Microsoft, buy the Microsoft products it previously rented, or migrate to non-Microsoft products.

NHS PASA is keen to allay users' fears that they will be left out in the cold. Rudd said, "One thing that will not happen is trusts being asked to find extra money at the end of the three-year deal to fund extra software." The deal is not a standardisation on Microsoft, he added.

Experts have also warned that the diverse nature of the NHS, the largest single organisation in the western world, could pose a real technology challenge. Robert Bond, head of innovation and technology law at corporate law firm Hobson Audley, explained, "My one concern is that the NHS should ensure that it has negotiated sufficient flexibility into the contract to ensure that all consultants, staff and NHS trusts have the ability to make use of the products."

Bond pointed out that the deal could lead to difficulties should IT departments become outsourced, although Microsoft denied this.

The contract provides a single annual software subscription to replace about 35,000 separate software orders.

It covers a range of PC products including Office Professional XP, Access 2002 and Word 2002. It will cover existing Microsoft products used by the NHS.

The NHS claims the deal will save it more than £50m during the life of the contract. It has not disclosed how much the NHS currently spends on Microsoft products, or the value of the new deal.

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