Register debate series It’s a lot of money, £9 billion ($12 billion). Especially for a government which finds itself — for whatever reason — in a fiscal dead end.
Between a taxation rock, a spending hard place, and a giant boulder of debt, those in charge of government finances have little room for maneuver.
Imagine, then, the idea that the UK public sector expects to spend around £9 billion on Microsoft products and services over five years under its current agreement. Some would argue that much of that proprietary software is available elsewhere, free and open source.
The MoU signed with the Redmond giant last year is set to see £1.9 billion ($2.57 billion) spent under the arrangement during each of its years.
To put that into perspective, the government’s capital spending program for school building is expected to be £6.8 billion ($9.2 billion) in 2025-26. Alternatively, changes to winter fuel allowance payments to pensioners, which prompted a volley of criticism from all sides, were set to save just £1.4 billion ($1.9 billion) a year when they were first announced.
The government says the Strategic Partnership Arrangement 2024 (SPA24) would offer “enhanced value across Microsoft’s portfolio of products and services.”
Any tough negotiations are unlikely to do Microsoft any harm. Its revenue rose 18 percent to $76.4 billion in the most recent quarter, while net margins are sustained at about 36 percent and have not dipped under 30 percent in more than five years. Revenue growth and margins together are propelling the company’s staggering valuation of more than $3.5 trillion.
The Register has heard from those advocating a FOSS alternative to Microsoft, and from those who think the public sector needs to improve its buying, but should stick with the Redmond giant, and those who feel a better balance between proprietary and FOSS would help get value for money.
But what do you think?
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