Government-MS deal could see price rises for some

New Zealand government departments thinking of reducing their reliance on Microsoft Corp. software could face increased licensing costs once the new G2003 group government license contract has been signed.

A team of eight people representing government departments has been hammering out a software licensing deal with Microsoft since last August. The contract will replace the G2000 group government contract, which expires for individual departments between June and September this year.

Government negotiator and department of Internal Affairs information and facilities manager Alison Fleming says the cost of Microsoft software may fall for departments which are already buying significant amounts of software through the Software Assurance licensing program and who continue with that regime.

“That is part of the pricing model Microsoft has offered to loyal customers.”

She says for some, however, especially those that choose to reduce their commitment to Microsoft, costs may rise.

Fleming wasn’t able to give an average figure for how much license costs are likely to fall or rise, claiming commercial confidentiality. She says the picture isn’t simple and depends on the mix and numbers of licenses and license types.

New Zealand Defense Force deputy director command control and information systems Warwick Sullivan, who is also on the negotiating team, says the likelihood that government departments which scale back their commitment to Microsoft will face increased licensing costs won’t stop his organization from looking at open source or other alternatives to Microsoft software.

Sullivan is interested in using open source software and would like to reduce Defense’s dependence on Microsoft. The Defense Force is identifying Web services that don’t need IIS or SQL 2000 so that it can put them on the Apache open source Web server.

Defense’s Microsoft license costs will rise, he believes, but “that’s because our usage of the software has increased.”

Fleming says “considerably more” government departments are showing interest in the G2003 contract than in the G2000 contract but she cannot say at this stage whether this will translate into actual uptake of the new agreement.

About 160 organizations representing more than 90,000 users have registered an interest in the negotiations. It is an opt-in agreement so government departments can choose whether or not to sign up.

Under Microsoft’s licensing rules, organizations that are at least 51 percent government owned are entitled to come under the program. That would include Air New Zealand, which last year made a high-profile decision to implement Linux on an IBM zSeries mainframe, to replace 150 Compaq servers running Windows NT.

New Zealand Open Source Society spokesman Peter Harrison says the government has shown some proactiveness in the area of technology, such as implementing an open standard guideline for communications.

“This is an excellent move which the NZOSS commends. We certainly do not wish to restrict government departments into using only open source. However, we would like some form of evaluation system built into software procurement processes to include open source solutions beside commercial software. This needs to happen because open source software is not backed by large marketing teams in the same way large commercial systems are.”

Oregon, in comparison, could become the first U.S. state to require that open source software be considered by its agencies as an alternative to any proprietary solution. If The Open Source Software for Oregon Act, introduced this week, is successful, state government agencies will have to consider open source software for all new acquisitions and make purchasing decisions based on a “value-for-money basis”. (See Oregon bill touts open-source option.) Moreover, under the act state workers would have to avoid buying products that don’t comply with open standards.

Meanwhile, a number of government organizations in the country are looking at Sun’s StarOffice, an alternative to Microsoft Office, according to SolNet marketing manager Jayne Stewart. Current users of this free office productivity package include Tranzrail’s passenger train service, Tranz Scenic, and Manukau Institute of Technology.