Microsoft signs new software deal with NPfIT

Health minister John Hutton has announced a three-year software licensing deal with Microsoft, claiming savings for the NHS of up to £112m over the next three years. 

The Department of Health (DH) says that the NHS will save a whopping £330 million over the lifetime of the deal, thanks to tight negotiations led by the National Programme for IT (NPfIT) director-general Richard Granger. 

By contrast no figures have been made available on how much the DH will pay or how these projected savings are calculated. An NPfIT spokesperson told EHI the information was covered by "commercial confidentiality".

A report in the Times, however, states that the deal is worth £500 million.  The deal is said to have followed negotiations between Microsoft CEO Steve Ballmer and NHS IT chief Richard Granger.

The contract, which is scheduled to last for up to nine years with three-year breaks, allows the use of Microsoft desktop software on a total of 900,000 computers across the NHS, compared to the 500,000 covered by the previous corporate licensing deal signed by the DH in October 2001.

Microsoft confirmed to EHI that the new deal will include a facility for NHS staff access Microsoft desktop software 'free' for home use, continuing an agreement struck in late 2001 after the inital contract had been signed.

The new agreement is structured to run for a nine-year period subject to three-year break points allowing for renegotiation should costs reduce or circumstances change.

The new deal also contains provision for software for mobile devices and PDAs, which the DH say will make electronic patient records available on the move.

Richard Granger, director general of NPfIT, said that the agreement "represents not only substantial savings over both previous NHS pricing but also that of other public sector purchasers. Extremely favorable terms and conditions for the NHS have been secured.

"We have robust methods in place to validate the usage of the Microsoft products under the agreement, which we will use to confirm the exceptional value that this deal delivers."

According to the DH, Microsoft has also committed to £40m of research and development as part of the deal that will allow independent software vendors to deliver an 'NHS-specific user interface'.

John Hutton said: "This is an exceptionally good deal for the taxpayer that genuinely reflects the buying power of the NHS and our commitment to value-for-money procurement.

"NHS staff will have access to the latest desktop software. This supports our drive to help modernise the NHS through sound investment in 21st century technology."

The announcement of the corporate licensing deal with Microsoft comes a week after the Office of Government Commerce published a document concluding that open source software is a viable alternative for the public sector. 

This August, NPfIT bought 5,000 licenses from Sun for the Sun Java Desktop system, which contains a suite of open source software and runs on Linux.