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UK gov's ‘save on MS software’ deal slip-sliding away?

NAO report contains signs it's not entirely happening

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Is the Office of Government Commerce pushing water uphill when it comes to saving money on UK government software licences? A report published by the National Audit Office this week, Purchasing and Managing Software Licences, contains not a few hints that this might be the case.

The OGC has, variously, negotiated memorandums of Understanding with software suppliers (the most significant of these being Microsoft), and published a guide on open source software implementation. It continues to make cautiously optimistic noises about the use of open source. Yet its savings target of £100 million over three years (one of which is already up) is largely dependent on the continued purchasing of Microsoft software by government departments, and although Corel, IBM and Sun have all struck similar deals to the Microsoft one with the OGC, they have found the response "disappointing" - only Sun, on the strength of StarOffice, remains optimistic.

The NAO surveyed 66 departments and agencies, received more detailed responses from ten, and conducted case studies on four. 31 departments have used the Microsoft memorandum so far, and the ten departments "were able to estimate likely savings... of around £5.4 million." The report comments hopefully that the remaining departments "had largely purchased their software and licences [before the memorandum and] may be waiting until their existing agreements expire before taking advantage of the new arrangements." The NAO itself doesn't have a procedure whereby departments can report savings to it, and therefore uses data from suppliers. From this, it calculates "savings of £31 million from direct price reductions" (which we presume is not exclusively memorandum savings) across the public sector up to January 2003.

95 per cent of departments have Microsoft licences, which total 775,000, 70 per cent of all licences held. National Audit Office head Sir John Bourn pats the OGC on the head for securing the memorandums, but says it has to publicise the benefits more widely. Quantities of them, it appears, profess to have never heard of them.

Essentially, the memorandum deals (specifically, the Microsoft one) can be seen as an attempt to short-circuit the 'divide, confuse, conquer' approach that software vendors can employ when dealing with governments department by department, or possibly in even smaller units, because it seems clear that numerous UK government departments do not even use their own mass to secure unified, advantageous deals. It may well be however that, so long as purchasing under the memorandums remains voluntary, so long as reporting is inadequate, and so long as ignorance is an excuse, a major balkanisation component will remain. (Last par entirely Regcomment, incidentally - as far as we know Bourn didn't say a dicky bird to this effect.)

Of the four departments subject to case studies, the Department for Education and Skills (70 per cent Microsoft by volume) is using MS' academic discount schemes, and is "working on identifying where all its software is held and how it is licensed." Much-audited (by both the DES and MS) UK teachers will take some grim satisfaction in learning that the report feels the Department's licensing database is only 75-80 per cent accurate, and that it needs to learn to count better.

The Ministry of Defence, with 130,000 Microsoft desktop licences, negotiated a four year deal prior to the engagement of the memorandum, and claims it could save £17 million on a total expenditure of £69 million. But one should consider the possibility that this is like those supermarket 'spend to save' offers. The more you spend, the more you save, and the more departments spend on MS Software, the more likely the OGC is to achieve its £100 million 'saving.'

It's worth noting that tracking licences, and controlling the unauthorised purchase and introduction of software, is a major issue returned to repeatedly in the report. This is of course a perfectly rational concern in the world of government software as it currently exists, and as it will persist through the Microsoft memorandum, but it's clearly an area where the government could also apply itself to identify savings - via, perhaps, alternative apporaches to licensing? ®

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