The Vale of Glamorgan Council
Cabinet Meeting: 1 June, 2015
Report of the Leader
Microsoft Software Licencing
Purpose of the Report
1. To obtain approval for delegated powers to award a contract for the supply of Microsoft Software.
1. That delegated authority is granted to the Managing Director in consultation with the Leader to award the tender to the winning supplier.
2. That a new contract is awarded on the most economically advantageous terms to the Council.
Reasons for the Recommendations
1. To allow the award of the contract.
2. To have an appropriate contract in place for the cost effective supply of Microsoft Licencing.
2. Following a Cabinet Report in June 2012, Minute number C1737 granted delegated authority to award a contract for the supply of Microsoft software. That contract is now due for renewal and similar delegated authority is required to allow a procurement process for a new three year agreement and award the contract to the most economically advantageous supplier. The intention would be to complete the procurement before the end of June 2015 when the current agreement expires.
3. Cabinet will be aware that all desktop and laptop computers have been upgraded to Windows 7 and that the latest version of Windows, version 10, will be available later this year. In order to maintain the rights to upgrade to the latest versions and use Microsoft software, the Council needs to be appropriately licenced.
4. Over the last three years the Council has entered into an Enterprise Agreement with Microsoft which covers all of the desktop software in use across the Council. The most cost effective agreement for the Council at that time was for subscription licences which are in effect software rentals rather than owning the software in perpetuity. The current agreement costs £102,282 per annum for 2,000 users.
5. If that decision was repeated, indicative costs for the new agreement show a slight rise in cost to approximately £108,000.
6. The current corporate desktop standard agreed by the ICT Strategy is Windows 7 as the operating system and Office 2010. However later versions are now available and the Council will need to consider moving to them at the most appropriate time.
7. Microsoft does not deal directly with corporate customers, so the Council would need to procure the licences through a reseller. Our current reseller is Computacenter and a tender will be advertised either through the Crown Commercial Services Framework Agreement or procurement will be through the Government Cloud Framework Agreement (G-Cloud).
8. The prices for Microsoft licences have been agreed nationally for the public sector through a National Government arrangement and are made available to all resellers, so the tender will focus on the margin added on to the Microsoft costs for dealing with the order. This has traditionally been around 1/2 % to 1% of the order value, however some resellers have been known to supply at cost in order to win the business as a method of developing a better business relationship with the purchaser.
9. Following corporate guidelines a quality assessment of any value added services that the supplier can provide such as assistance with implementation, training and after sales support will be undertaken, but price will be the predominant factor. The price/quality ratio has been set at 70/30.
Relevant Issues and Options
10. In recent years the range of software available under an Enterprise Agreement has grown dramatically as have the options for procurement. The tender will ask suppliers to provide costs and to clearly outline the advantages and disadvantages of each option. Microsoft has also moved from a 'per device' to a 'per user' licence model. The main change has been the advent of Microsoft Cloud Services such as Office 365. This allows users to access their e-mails and saved documents from anywhere as they are saved in Microsoft Datacentres in Dublin and Amsterdam.
11. Sensitive documents can still be stored locally where required.
12. The Enterprise Agreement for the Office 365 software can include additional software such as Microsoft Sharepoint, which could be used to replace the current document management system TRIM, and other functionality such as anti-virus, encryption, mobile device management and others. An evaluation process to decide whether to replace the current products that provide this functionality with the Microsoft products may bring an opportunity to reduce costs.
13. However indicative costs that have been obtained show that a move to cloud based licencing is considerably more expensive and the savings obtained by using Microsoft instead of current suppliers, may not generate a sufficiently good business case to make this move at this point in time.
14. For the first time licencing of the Council's server estate is being considered for inclusion into the Enterprise Agreement, thereby bringing server licences onto the same basis as desktop licences and at a reduced cost compared with buying server licences through the standards Microsoft Select agreement which is currently undertaken on an ad hoc basis.
15. Microsoft has a number of licencing plans which include different selections of their software applications. It is envisaged that the Council will purchase licences under plan E3 which gives the best mix of software for the Council at the most competitive pricing.
16. All of the options provide additional benefits as a result of having software assurance built in and include on line training, 24x7 support and a home use program for staff.
Resource Implications (Financial and Employment)
17. It is proposed that the purchase of the licences is funded from the ICT fund and then recharged to user departments, which has been the case for the last three years.
Sustainability and Climate Change Implications
18. There are no sustainability or climate change implications for this report.
Legal Implications (to Include Human Rights Implications)
19. The Council will need to enter into a contract for the supply of Microsoft Licences under the terms and conditions of a Crown Commercial Services Framework Agreement or the Government Cloud Framework Agreement (G-Cloud) with the winning supplier.
Crime and Disorder Implications
20. There are no Crime and Disorder implications for this report.
Equal Opportunities Implications (to include Welsh Language issues)
21. There are no Equal Opportunities implications for this report.
22. This project comes under the priority outcome of Community Leadership
Policy Framework and Budget
23. This is a matter for Executive decision.
Consultation (including Ward Member Consultation)
24. Consultation has taken place with all Heads of Service as part of the ICT Strategy.
Relevant Scrutiny Committee
25. Corporate Resources Scrutiny Committee
Vale of Glamorgan ICT Strategy
David Vining - Head of Strategic ICT
Alan Jenkins - Finance
Graham John - ICT
Steve Leat - Procurement
Rob Thomas - Managing Director