Feeds

Australian government gouged on PC software prices

Corrected: software expensive, PCs competitive

Beginner's guide to SSL certificates

Consumers aren’t the only buyers that suffer the infamous “Aussie tax” on IT: AGIMO has revealed that its desktop OS software purchases cost about double similar purchases by the US and Singaporean governments, although its hardware arrangements yield competitive prices.

Chiming into the price gouging debate, AGIMO has stated in its submission to the parliamentary inquiry that for Microsoft software “Gartner advice indicates that the difference in the base government price means that the US Government is paying some 50% less than the base government price in Australia. The Singapore Government prices also appear to be some 50% below those charged to the Australian Government”.

That price gap might be easy to justify given the size of the US government. However, Singapore’s roughly $240 billion GDP is well below Australia’s (around $1.4 trillion, according to the World Bank), suggesting that scale isn’t the only factor in play.

While Australian hardware prices are well above those two international benchmarks, AGIMO states that the whole-of-government purchasing arrangements it administers have yielded considerable savings compared to street prices for IT. It claims an estimated saving of $20 million in desktop hardware procurement since 2010, and savings of more than $80 million in Microsoft licenses since 2009.

Citing Gartner as its source for average hardware prices, AGIMO states that “the Australian Government is now paying more than 50 percent less than the Australian market average for standard desktops and more than 25 percent for standard laptops.”

There are clear economy-of-scale advantages to AGIMO’s whole-of-government purchasing arrangements. Moreover, as AGIMO notes, vendors must sell to the government under these arrangements: “the vendors know there is no alternative and are thus motivated to participate effectively”, the submission notes.

Vendors will be able to point out that per-unit cost-of-sales is lower under whole-of-government arrangements than through a retail channel: the government buys around 7,000 desktops per quarter under its contract arrangements.

However, if even the government can’t completely beat international price discrimination, it’s hard to credit statements that shipping, retail costs and tax make up the whole of the differential. ®

Bootnote: The earlier version of this story incorrectly applied a software price benchmark to hardware. The author regrets the error. ®

Security for virtualized datacentres

More from The Register

next story
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Spies, avert eyes! Tim Berners-Lee demands a UK digital bill of rights
Lobbies tetchy MPs 'to end indiscriminate online surveillance'
How the FLAC do I tell MP3s from lossless audio?
Can you hear the difference? Can anyone?
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.