NHS Awaits Treasury Approval of Landmark Microsoft Deal

The Department of Health and NHS Purchasing and Supplies Agency (PASA) have completed negotiations of a critical national software licensing deal with Microsoft to provide the company’s latest desktop personal productivity and back office applications to 300,000 NHS users. Final approval of the business plan is expected from the Treasury within the next two weeks.

The nationally negotiated deal forms a key component of plans to provide all NHS clinicians with access to e-mail and Internet access by March 2002, with these tools being made available to all NHS staff by March 2003.

A Department of Health spokesperson confirmed to Medexonline that the business case had been passed to the Treasury within the past couple of days, and that although not yet signed, confirmed the deal “definitely will be agreed”, with a final announcement was due within "weeks".

The NHS is already one of the biggest purchasers of Microsoft products in the UK, but until now has bought software in an often piecemeal fashion. The introduction of the NHS national licensing deal, based on Microsoft’s Enterprise Agreement licensing model, under which the NHS aggregates its purchasing, should deliver significant purchasing efficiencies to the service.

Once approved by the Treasury the three-year deal will see the NHS become one of Microsoft’s top five global clients. Although figures on value of the deal have not been released, it is likely to account for the lion’s share of the £20m earmarked for nationally negotiated investment in software for the NHS this year.

Ellen Pirie, health business manager with Microsoft UK, told Medexonline that once signed the NHS will become one of Microsoft’s biggest customers. "The NHS will certainly be one of our biggest customers, one of the top five worldwide," said Pirie. The UK Ministry of Defence signed a similar licensing deal with Microsoft this May covering 120,000 users.

Once the central arrangement is signed, the number of licences taken by the NHS is not restricted, as a central annual licence fee will be paid. According to the Information Policy Unit’s (IPU) guidance on the deal http://www.doh.gov.uk/nhsexipu/whatnew/deskfaq.htm an online tracking facility will be developed to centrally monitor uptake of products.

Microsoft products covered in the national deal include Office Professional XP and Back Office Client Access Licence (CLA), which includes Exchange Email. Separate, smaller deals are being negotiated by the NHS Purchasing and Supplies Agency (PASA) with other software suppliers including Corel, Lotus and Novell.

A further £30m was directly allocated to local NHS organisations at the beginning of September for investment in the accompanying hardware required to meet the national connectivity targets.

Significantly, the deal will ensure the 300,000-plus NHS users covered all have the latest versions of Microsoft’s software products, which should greatly enhance productivity and information exchange across the service.

Guidance on the software licensing deal from the NHS Information Policy Unit (IPU) stresses that the Microsoft licensing deal does not imply standardisation on Microsoft systems and architecture, stating that the aim is simply to "get best money for the NHS".

However, the updated NHS IT strategy ‘Building the Information Core’ clearly spells out the goal of a ‘standardised desktop’ for all NHS staff, and Secretary of State for Health Alan Milburn has also repeatedly made clear the objective is to "ruthlessly standardise" on NHS IT.