The nine-year deal updates a three-year corporate licensing agreement struck between Microsoft and the NHS in 2001 and covers up to 900,000 NHS computers, compared to the previous 500,000.
According to the NHS’s NPfIT (National Programme for Information Technology), the terms of the deal will save the NHS up to 300m pounds ($552m) in costs compared to the previous deal, including 112m pounds ($206m) in the first three years.
Although the deal runs for nine years, the NHS will have the right to terminate or renegotiate the deal every three years to allow for pricing and product changes.
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, said UK Health Minister, John Hutton.
The agreement was reached after the director general of NHS IT, Richard Granger, recently met with Microsoft CEO, Steve Ballmer, following earlier talks between Granger, the Secretary of State for Health, John Reid, and Microsoft chairman, Bill Gates.
Those negotiations have also produced a provision whereby Microsoft has set aside 40m pounds ($73m) to develop a new user interface for the health industry at no cost to the NHS, enabling third-party software supplied to the NHS to better interoperate with Microsoft products.
Microsoft has already started to develop the interface with the help of NPfIT clinicians, with the first version expected to be delivered to the NHS in early 2005. Code will also be supplied to independent software suppliers to the NHS to provide a common interface for the clinical systems used across the health authority.
The NHS could also benefit financially from the new interface as it has entered into an agreement with Microsoft to receive a share of any license fees accrued through the licensing of the code to other health organizations.
Although Microsoft was always likely to win a follow-up to its 2001 corporate licensing agreement, the signing of the deal still represents a significant boost following recent UK Government approval for Linux on the desktop.
In August the NPfIT purchased 5,000 tactical licenses for Sun Microsystems Inc’s Java Desktop System, having concluded that JDS represents a viable desktop alternative for certain types of user communities after eight months of evaluation trials for the Linux-based desktop system.
That approval was cemented by the UK Office of Government Commerce’s recent statement that Open source software is a viable and creditable alternative to proprietary software for infrastructure implementations, and for meeting the requirements of the majority of desktop users.
And while the new licensing agreement means that Microsoft will be involved with the NHS for at least three years, the door is not closed to open source alternatives. The option to use open source software in the future remains and continues to be evaluated, the NPfIT said in a statement.
