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U.K. government renegotiates Microsoft fees

By Laura Rohde
June 5, 2002 8:23 am PT

EMBOLDENED BY ITS renegotiated software licensing agreement with Microsoft, the U.K. government is debating the possibility of using open-source software to complement or even replace some of its Microsoft software.

In November, the Office of Government Commerce (OGC) said it was in talks with Microsoft over a single contract to supply its Office and Windows software to the country's 497,600 public servants. The government had threatened to cease using Microsoft software if the parties could not come to an agreement over an increase in licensing fees that the OGC claimed could raise costs by as much as 200 percent.

The OGC, in Norwich, England, was established in April 2000 by the U.K. government as an agency within the U.K. Treasury to modernize its IT procurement procedure, assuring that the government gets value for the money it spends on IT.

Earlier this the year, the OGC started asking all of the different government departments how much they were each paying for their Microsoft licences, only to discover there were huge discrepancies between departments, said OGC spokesman Martin Day.

The government then decided for the first time to negotiate with Microsoft as a united group, rather than on an individual basis. "This was something that Microsoft had not come up against before and they were none too happy at first," Day said.

On March 1, the U.K. government signed a licensing agreement with Microsoft that the government estimates will save taxpayers $147 million over the next three years, Day said. Day declined to specify the total value of the deal.

Microsoft declined to speak in any detail about its agreement with the government.

According to Day, the government is also now giving agencies some leeway to choose non-Microsoft office productivity products, including software from Sun Microsystems and IBM's Lotus Software Group, for the first time.

The multivendor approach will allow government departments across the U.K. to choose the software that best suits its needs, be it Microsoft Windows and Office, Sun's StarOffice software package or IBM's Lotus Notes, he said.

"Lotus doesn't have the best desktop software but Lotus Notes does give Outlook a run for its money. The new deal with Microsoft helps to bring greater competition to the government's IT purchases. Also the issue of open source is a big one. You won't get much of a discussion about the topic with Microsoft, but you can bet your life that Sun will discuss open source," Day said.

The OGC is now strongly encouraging department to look at alternatives when it comes to desktop software as well as other software, Day said.

"The open-source debate is still going on within the U.K. government departments. But it is important that the government departments have now opened up to that debate and I expect something more concrete will begin to emerge soon," Day said.

But some U.K. groups advocating the use of open-source software are accusing the government of merely talking about open source because it is a trendy topic, rather than acting on bringing the use of software using Linux or similar platforms into practice.

"The government isn't going down into the fundamental issue it has with e-commerce and software, which is security," said Eddie Bleasdale, project manager for Netproject Ltd. The Morden, England, company is a for-profit consultancy and association of user organizations including Royal & Sun Alliance Insurance Group, Nationwide Building Society, National Grid and government departments.

The government has become increasingly reliant on Microsoft software and was only willing to advocate for itself with Microsoft when it worried that its licensing agreements were becoming too expensive, Bleasdale said.

"It's a waste of time what we're doing. What we really need in government -- and what I've told the e-commerce and competition minister -- is that what we must make sure of is that we have client devices that are absolutely secure. The government's response is to stick its head in the sand, and that is where it remains," Bleasdale said.


Laura Rohde is a London correspondent for the IDG News Service, an InfoWorld affiliate.

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