TechnologyAccounting SoftwareOGC seals cost-saving licensing deals

OGC seals cost-saving licensing deals

Central government purchasing body, the Office of Government Commerce, has earned praise from the National Audit Office for its negotiation of software licensing agreements.

The OGC has established agreements with suppliers such as Microsoft and Oracle, and had been expecting to save between £40m and £60m per year by negotiating good rates with suppliers. The deal with Microsoft alone was expected to save £100m over three years.

In its report, Purchasing and Managing Software Licences, the National Audit Office states that savings achieved by January 2003 amounted to #31m, and the OGC is confident that more departments will sign up to the discount scheme in the coming months.

‘Many departments have existing contracts in place. As these come to an end, they will look to move on to the terms offered by the deal,’ said an OGC spokesman. But a lack of awareness has also hampered the scheme’s take-up.

‘Our discussions with departments indicated that not all were aware of the agreements with suppliers,’ stated the report.

Additionally, many departments underestimate the total cost of upgrading their software. Fewer than half of the survey’s respondents considered the total cost of ownership before upgrading their software, according to the report’s findings.

By signing up to the agreement reached between Microsoft and the OGC, departments would be entitled to upgrade to Microsoft’s latest operating system, Windows XP. But the operating system requires a PC with a 300MHz Pentium II processor and 128Mb of Ram. As such, there is a risk that departments may ‘underestimate the full cost of investment in IT,’ warns the National Audit Office.

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