HMRC and Cabinet Office spend £100m on Microsoft licensing deals


Two major Whitehall departments have awarded major contracts for the provision of technology from the software giant and related services, with both deals being won by UK IT reseller Softcat

The Cabinet Office and HM Revenue and Customs have signed deals worth a cumulative £100m-plus to cover the provision of Microsoft products and related services over the coming years. Both contracts were awarded to IT provider Softcat – one of Microsoft’s biggest UK reseller partners.

The HMRC agreement, which came into effect at the start of the month, is by far the larger of the two: valued at up to £97.8m, once tax is included. The deal covers the provision of software and support for Microsoft’s Azure cloud platform.

The department requires a supplier “who can assist with the most cost-effective deployment of Microsoft Azure technology [and has] a proven track record of working with large public sector accounts”, according to the text of the contract.

The document adds that HMRC was “seeking a reseller who is expected to work collaboratively… with the authority to deliver seamless management” of the department’s estate of server and cloud licences.


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This will involve breaking down licensing by various areas and teams, and delivering “accurate billing that allows the subscriptions to be segmented whereby only the prepaying business area can utilise any pre-payment made”.

Over the course of the engagement, Softcat will asked to “present new ways of working to [HMRC] during contract review meetings” and “will be expected to continually improve the way in which the services are to be delivered throughout the contract duration.”

The reseller is required to “track and record accurate details of consumption usage purchased through the agreement, work with HMRC and Microsoft to track Microsoft SLAs, ensuring Microsoft apply any applicable service credits, [and] manage any changes to meet new emerging needs if applicable, [which] may include new Microsoft products identified… during the contract life”, the agreement says.

The Cabinet Office deal, meanwhile, appears to cover a broad range of Microsoft licensing needs. The contract was awarded via an aggregated savings arrangement recently created by the vendor.

The deal came into effect on 8 May and is valued at £15m.

Both departments’ contracts run for an initial term of three years, plus an optional one-year extension.

Sam Trendall

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