THE UK GOVERNMENT has struck a deal with Microsoft that will see it avoid a post-Brexit price hike after the firm announced plans to raise the cost of on-premise licences by 13 per cent and cloud by 22 per cent.
Those price increases were at the time attributed to "sustained currency changes" following the Brexit vote and the halving of interest rates by the Bank of England.
The government had a fixed-priced deal expiring in June 2017, but The Register reports that Microsoft has agreed with the Cabinet Office's Common Technology Services to extend the terms of this deal by a further year. This deal will freeze the prices across government at pre-increase December 2016 levels, saving an estimated £15m.
Negotiations between the government and Microsoft over licence fees is a regular feature. Back in 2012, the Cabinet Office devised a new framework that claimed to exempt the UK public sector from licensing hikes that saw many organisations pay between 7.5 per cent and 33.4 per cent more for the privilege of running Microsoft software.
The Cabinet Office, in contrast, was only hit with a one per cent licence-fee increase, with years two and three of the contract linked to the Consumer Price Index.
However, by 2014, the Cabinet Office minister Francis Maude was making noises about open source software as the government geared up to renegotiate.
"The software we use in government is still supplied by just a few large companies. A tiny oligopoly dominates the marketplace," said Maude at the time.
"I want to see a greater range of software used, so civil servants have access to the information they need and can get their work done without having to buy a particular brand of software."
In the end, though, the government ended up signing its current cloud and on-premise software licensing deal with Microsoft, rather than shifting to open source. µ
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