Credit: Pxhere

The Ministry of Housing, Communities and Local Government has spent £9m on a contract to cover its Microsoft licensing needs for the next three years.

The deal, covering a “Microsoft Enterprise Agreement and associated services”, came into effect on 1 January and runs for this and the next two calendar years, concluding on 31 December 2023. 

The contract has been signed with York-based IT provider Phoenix Software – a leading Microsoft reseller partner, which focuses on the public sector. The deal was awarded via the £6.5bn Technology Products and Associated Services framework.

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In the first year of the engagement, MHCLG expects to spend £2.18m, plus VAT.

“The estimated three-year costs are £9.08m… which is expected to cover any increased usage[and] users during the term,” procurement documents said.

Microsoft Enterprise Agreements, covering a range of operating licences and cloud services are available for a minimum term of three years for organisations with over 500 users. By committing to such a comprehensive deal, businesses and public sector entities can save between 15% and 45%, according to the vendor’s website.

“You also have the option to spread your payments by making three annual payments instead of one upfront payment,” it added. “This helps reduce initial costs and helps you forecast annual software budget requirements up to three years in advance. The Enterprise Agreement includes a subscription option that lowers initial licensing costs because you subscribe to the rights to use Microsoft products and services instead of owning them. The subscription option also enables you to increase or decrease subscription counts on an annual basis.”