NHS chooses Microsoft over Open Source

Nov 4 2004

The NHS has reached a landmark agreement with Microsoft on the renewal of the licensing of its desktop products in line with the OGC's framework agreement with Microsoft.

The arrangement will allow the NHS to use up to 900,000 licences, compared to the current 500,000 with the licences being held on a perpetual basis rather than being renewable annually.

The arrangement will last for nine years, with break points at three-year intervals, which will allow for renegotiations in the event of unpredicted pricing or product shifts in the market place. There will be initial savings of £112m over the next three years, and in excess of £330m over the length of the contract. The option to use Open Source software in the future remains and continues to be evaluated.

The Secretary of State for Health, John Reid, and Richard Granger, Director General NHS IT, met with Microsoft's Bill Gates earlier this year to discuss Microsoft's involvement with the NHS. The formal agreement was reached after discussions led by Richard Granger and Steve Ballmer, Chief Executive Officer of Microsoft Corp.

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."