Rejigged Microsoft and SAP deals to save Government £70m


The Government has hailed the introduction of two new software deals that it claims will net it 70 million in savings by 2015.

The first involves Microsoft and is expected to save the central government 65 million in licensing costs, while the second is tipped to generate savings of at least 5 million on SAP products.

We moved the needle with both of these suppliers, in the range of a 20 per cent additional discount.

The news follow on from a similar announcement back in March, when the Government announced a new deal with software behemoth Oracle, which it claims would save it 75 million by 2015.

Speaking at a media event in Whitehall earlier today, Stephen Kelly, Government Crown Representative, said the agreements were the result of the Government drawing on its bulk-buying power.

He also revealed that the Microsoft deal took nine months of negotiations to come about, while the SAP one took half a year.

"[We] categorised the savings to central Government as 70 million during the rest of this Parliament, but the savings in the wider public sector context are much more significant than that," he said.

"We moved the needle with both of these suppliers, in the range of a 20 per cent additional discount off software licenses and also moved it up to a maximum threshold level of 80 per cent discounts off their published price."

In the case of the SAP agreement, the Government will also save money on support and maintenance costs, he revealed.

"[SAP] has allowed us to have a discount in excess of 20 per cent on the running costs of the support and maintenance charges through their premium support for large enterprises," said Kelly.

He also confirmed the Government will be unaffected by Microsoft's European volume license pricing changes, which are set to come into force at the start of next month.

"Effectively, we've agreed that, through the rest of this Parliament, the prices going forward will remain the same as we sit here now," he said.

"So, [there will be] no significant price increases, no impact from Euro harmonisation and we protect the taxpayer."

Local councils, health trusts and police authorities will be able to take advantage of the deals via the Government Procurement Service.

In a statement, Cabinet Office Minister, Francis Maude, said the arrangements will provide better IT for less to public sector organisations across the country.

"We have skilled negotiators within Government and we are building up this expertise, taking a strategic view and acting as the taxpayer's champion," he said.

"This is better for business [because] we now work more intelligently with our big suppliers and there's more transparency over future buying plans."

Caroline Donnelly is the news and analysis editor of IT Pro and its sister site Cloud Pro, and covers general news, as well as the storage, security, public sector, cloud and Microsoft beats. Caroline has been a member of the IT Pro/Cloud Pro team since March 2012, and has previously worked as a reporter at several B2B publications, including UK channel magazine CRN, and as features writer for local weekly newspaper, The Slough and Windsor Observer. She studied Medical Biochemistry at the University of Leicester and completed a Postgraduate Diploma in Magazine Journalism at PMA Training in 2006.