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Microsoft loses NZ Windows government deal

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Microsoft has failed to renew a key government-wide purchasing deal for Windows, opening the door to greater use of open-source software.

Talks between Microsoft and New Zealand's State Services Commission to renew a purchase agreement for the next three years have ended without the desired agreement, as it became apparent "a formal agreement with Microsoft is no longer appropriate," the agency said.

A government spokeswoman said the government looks for value for money, fitness for purpose, and strategic benefit in its negotiations. "We didn't feel we got the appropriate levels of benefit from the negotiations," she told Computerworld.

The New Zealand government has been recognized for its adoption of open source. The collapse of the deal suggests the government feels it can now rely on its own skills and experience to a greater extent and that it has a greater choice of options from suppliers.

Under a procurement deal with Microsoft, government agencies would buy products on an opt-in basis, probably at an agreed price range in return for volume.

Negotiations between Microsoft and the government for the latest installment in this three-year agreement, which began in the year 2000, started in late 2008.

The government had established a committee of senior executives from the largest IT purchasers in the public sector to conduct the negotiations. But it seems that Microsoft could not give the purchasers what they wanted either in features, roadmap, or price.

Microsoft has now agreed to provide "recommended retail price certainty" for government agencies that will conduct their own, individual negotiations with the company, while the State Services Commission said it would support agencies exploring trying to "maximize their ICT investment and achieve greater value for money". ®

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