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Public sector exempted from swingeing Microsoft UK price hike

Redmond keen to avoid another Maude handbag

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The British government will not feel the squeeze of Microsoft price rises on volume licensing when the three-year Public Sector Agreement (PSA)12 launches on 1 July, The Register can reveal.

The company yesterday gave UK resellers and customers a preview of the new look price list, also due to kick in at the start of July, confirming hikes of more than a third as it aligns licensing prices across the EU to the Euro.

In a note sent to customers and seen by El Reg, Microsoft confirmed the cost of Enterprise Agreements will rise by an average of 25 per cent and Select Plus deals will be 24 per cent more expensive.

On average, prices across the volume licensing SKUs for corporate and government customers - except in education - will climb 29 per cent.

But loquacious and reliable channel sources, who sat on a call with Microsoft Large Account Reseller manager Edward Hyde, told The Reg that public sector customers would see no rises.

"Microsoft has told us that the PSA 12 will be heavily discounted and the net effect is that the public sector will not see an impact from EU price alignment, it will be entirely offset," said a Microsoft reseller.

The Cabinet Office lifted a six month moratorium on Microsoft purchases in the NHS last December, after settling on a discount of 16 per cent on the soon-to-expire PSA09.

Sources say Microsoft did not want to upset Francis Maude and his merry band in the government's Efficiency Reform Group by hiking prices at a time of austerity.

Asked for comment on the matter, Microsoft said in a statement to the Reg:

The Cabinet Office and Microsoft will provide a further update shortly regarding pricing and licensing for the UK government, to replace the PSA09 framework. In the meantime we can confirm that the terms of the PSA09 framework will remain in place until 30 June.

A Cabinet Office spokeswoman added:

"The Cabinet Office and Microsoft will provide a further update shortly regarding pricing and licensing …"

It's interesting to see that, after the spat last year, Microsoft and the Cabinet Office are singing from the same hymn sheet. ®

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