UK government screws £330 million out of Microsoft

The National Health Service (NHS), will be able to use up to 900,000 licences rather than the current 500,000 Microsoft licences it has, while those will be on a perpetual basis rather than being renewed every year.

The announcement suggests that previous deals the NHS had with Microsoft had their shortcomings.

The deal will last for nine years, with break points every three years. Those breaks, said Hutton, will allow renegotiations "in the event of unpredicted pricing" or product changes.

There will, of course, be several product changes on Microsoft products over a period of three years. The NHS will continue to have an option to use Open Source software if it decides to.

The first savings will be in the shape of £112 million for the first three years, and the deal was brokered between John Reid, the secretary of state for health, when he met with Bill Gates earlier this year.

According to Hutton, the deal means NHS staff will have access to the latest desktop software. Microsoft will also provide the NHS with £40 million of R&D to produce guidelines and toolkits for independent software vendors to deliver NHS specific graphics user interfaces. µ