DH axes £500m Microsoft licensing deal

The Department of Health will not renew a half billion pound software licensing deal with Microsoft, which has run for 12 years.

The DH’s IT agency, NHS Connecting for Health, has written to NHS organisations telling them that there will be no new deal and that in future they will have to negotiate directly with Microsoft.

Because the NHS Enterprise-wide Agreement was for perpetual licences, NHS trusts will still be able to use most existing software and will still have access to Office 2010 Professional and Windows 7 Professional.

But future releases of desktop, operating system and server licences will not be covered.

“Going forward, individual local organisations will be responsible for all aspects of funding, purchase, and management of Microsoft licences,” advises a 9 July letter from CfH.

The lapsed deal made the NHS one of Microsoft’s largest customers in the world. The EwA covered most of the Microsoft desktop and personal productivity software, for up to 850,000 NHS users.

It was first signed in November 2004, with an unconfirmed value of £500m. The nine year agreement included three-year breakpoints to enable the NHS to review its technology requirements.

The 2007 renewal saw the deal extended to cover Microsoft Exchange, the then-new Windows Vista operating system, and anti-virus technology.

NHS staff were able to get copies of Microsoft software for home use at a token price. With the end of the deal at the end of May this perk was withdrawn.

Microsoft also invested £40m in a Common User Interface programme to develop consistent ways of presented information in IT systems and to provide guidance to trusts on how to make IT easier to deploy and maintain.

The parallel Microsoft Server Application Platform Agreement has also been terminated with effect from 30 June.

By letting the agreements lapse, the DH is in effect passing on costs to local NHS organisations, most of which are Microsoft ‘shops’ and  rely heavily on Microsoft products that their staff have been trained to use.

Local IT departments have based much of their development on Microsoft technologies.

Sources suggest that the DH sought to secure a new deal with Microsoft at greatly reduced cost, citing the straightened state of the economy and cuts in public services. The DH, however, failed to respond to any questions relating to the deal.