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MS UK locks in schools via 'special terms' sponsorship deal

DfES takes relaxed view of 'commercial interest'

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A sponsorship deal between Microsoft and the Department for Education and Skills has positioned the giant to be the dominant supplier in English schools, and according to Register sources is already causing some schools to cancel open source projects "in case they upset the sponsor [i.e. Microsoft] or the DfES failed their bid." The rules of the mechanism Microsoft has used, sponsorship for 100 applicants for specialist schools status, at a claimed value of £1.5 million, appear to have been relaxed or even subverted, the effect being to tilt the playing field dramatically in Microsoft's direction.

The granting of specialist schools status triggers extra Government funding of £500,000 for the school, but one of the criteria the applicant school has to fulfil is £50,000 in external sponsorship. Microsoft's £1.5 million gives the 100 schools in question an average of £15,000 towards this, and is clearly going to be attractive. The DfES itself says the deal will give an "average sized" school access to £63,000 worth of software over four years, which of course means that the sponsorship is coming in kind, not in cash.

This takes us into interesting, even dubious, territory. The rules for specialist school sponsorship require that there is no commercial interest for the sponsor in making the donation, and that if the sponsorship is in kind, then it should be assessed at its true worth for the school being sponsored. Register sources, however, say there has been no audit of the software the sponsored schools already have. If, as seems likely, the sponsored schools already have some or all of the software being offered, then the cost to Microsoft and the actual value of the sponsorship will be lower. It will however still be in the school's interest to accept Microsoft sponsorship because the funding takes it closer to its target, whether or not the actual value is notional.

Companies sponsoring schools are barred not to supply the school for four years according to the sponsorship rules, which also outlaw loss leaders and discounts. But the Microsoft deal effectively subverts these rules, as the sponsorships clearly are in Microsoft's commercial interest, and the DfES has specifically made an exception to the rules for Microsoft in its guidance documents. Oracle, another recent addition to the sponsor roster, has similar terms but clearly does not have commercial interests comparable to Microsoft's in the schools sector. One consultant told The Register that any other company offering the DfES sponsorship on a similar basis would have its application rejected.

A forthcoming report from Government IT agency BECTA on TCO in schools is expected to say that savings could be made by using Open Source Software, and that the main cost is not licensing but hardware and management. Microsoft's schools agreement is also currently the subject of an Office of Fair Trading investigation. Said Schools Minister Stephen Twigg: "This is an exciting and unique new partnership. Microsoft is an organisation that is well placed to inspire and support schools in developing the vision of success that is at the heart of the Specialist programme." Specialist Schools Trust Chief Executive Elizabeth Reid expressed herself "absolutely delighted," while Microsoft UK director of education David Burrows noted that "schools who in the past may not have been able to, can now apply for specialist status as Microsoft is able to help 100 of them meet the IT resourcing criteria required."

Indeed. Bill Gates is still the richest man in the world, and has a knighthood. ®

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