In keeping with procurement reforms introduced earlier this year, the DPWS is facilitating collective negotiation of the deal worth just under AU$100 million between NSW government departments and Microsoft. However there are early indications that NSW will reject the licensing model Microsoft has attached to the offer.
Microsoft has offered to guarantee the NSW government a per-seat cost of AU$772 for 60,000 to 120,000 installations of Microsoft Office XP. According to well-placed sources the offer is conditioned on the agencies accepting Microsoft's subscription licensing model.
However, sources within NSW Supply, the main procurement vehicle for the state government, said yesterday that accepting a subscription or leased software model, which would see government agencies left without rights to use the software after their licenses expire, would be "very dangerous".
According to NSW Supply, the government would prefer a perpetual licensing model, in which the software licenses are purchased outright.
The DPWS called a meeting of chief information officers from key government departments this week to consider Microsoft's offer. According to NSW Supply, the CIOs present at the meeting displayed a mixture of positive and negative reactions to the deal.
NSW Supply said that the proposed deal did not necessarily bind agencies into becoming a Microsoft site or somebody else's site. The agencies will have the opportunity to review their own requirements.
The subscription model is an enterprise software agreement that became available as a part of Microsoft's Licensing 6.0 which came into effect August.
According to the Microsoft the software leasing scheme was designed for enterprises that want to spread the cost of their software over the life of its use.
However industry observers believe Microsoft has been moving towards subscription models as a means of stabilising their annual revenue by trapping enterprises into a perpetual upgrade cycles.
Microsoft 6.0 licensing arrangements that took effect August have attracted heavy criticism. Under the new license arrangements businesses were required to sign on to Software Assurance maintenance plans for two or three years. Those who didn't sign would have to pay the full price of future upgrades.
Gartner, vocal in its criticism of 6.0, calculated the some business would pay up to 107 percent more for software under the scheme.
According to Gartner for enterprises to purchase software assurance within the duration of their current licensing arrangements would have, in many cases, required them to put up significant business cases for unplanned expenditure
According to Gartner, Microsoft has gone part way to making some concessions expanding the scope of current Microsoft software eligible to sign up for the scheme.
Sun Microsystems is expected to put together a pitch to challenge Microsoft's offer as part of its ongoing to campaign to expand the presence of its StarOffice package in the enterprise desktop space.
Why not just say no to Microsoft's plan and go to Linux/OpenOffice? Maybe when you threaten to go to the competition maybe Microsoft may give you what you want even if they don't your still going to save money going to Linux/OpenOffice anyway.