Meeting documents

PRESENT:  Councillor Cartwright (Leader); Councillors Ashenden, Mrs Morgan-Owen, Mrs Paternoster, Mrs Polhill, Rowlands, and Stewart.

APOLOGIES: Councillors James, Liverseidge and Sir Beville Stanier.

Consideration was given to the detailed report of the Director of Corporate Resources, previously circulated to all Members of the Council, regarding the costs of procuring Microsoft Software products licenses.

Microsoft was taking advantage of its monopolistic position in the market place by changing its charging regime.  Instead of the traditional method of charging for product upgrades, users would in future have to acquire licenses to run the new version at full new version acquisition prices.

This issue was especially significant to large computer users such as AVDC.  The Council could not simplistically adopt a strategy of not upgrading its Microsoft products.  The interdependencies between different software products throughout the Council and between AVDC and other organisations were such that this approach would be completely untenable.  The Council's systems would become unusable within a very short period.  Also, the costs of changing suppliers from Microsoft to a competitor would be extremely high.

The options available to the Council were to do nothing, purchase upgrades as and when necessary or to enter into an Enterprise Agreement with Microsoft.

The first option would result in the Council at some point during the next three year period being presented with a bill likely to be in excess of £550,000.  Thereafter, the Council would face an annual cost of an unknown amount.  In addition there was the possibility that the Council would open itself to legal action in the interim period.

The second option would mean that it would be extremely difficult for the Council to estimate accurately its costs, as the timing of upgrades was open to a degree of subjective decision making.  Based upon the information currently available, the likely costs of such a strategy over the next three years would be in the region of £486,000.

In the circumstances Members felt that the option regarding an Enterprise Agreement would be best for the Council to take.  Such an agreement would be based upon the number of clients in use at the beginning of each financial year.  However, the rate per client would be fixed in monetary terms for the first three years of the agreement, with the rate for the fourth year being open to negotiation.  Discussions pursued by the Officers had resulted in the Council being offered a 7.5% discount on the standard rate subject to the agreement being signed before 30th June, 2001.  The estimated costs to the Council of this approach would be £114,000 pa over the period 2001-02 to 2003-04.

No budgetary provision existed for this payment in the current year.  Although the Officers would seek opportunities for savings it was not anticipated that it would be possible to offset the whole amount in this way.  It was therefore probable that the cost would need to be met from balances in 2001/02.  Budgets for future years would need to be adjusted to take account of this expenditure.

Members expressed some concern about the ability of Microsoft to flex its market position in such a way as to leave all users, both in the public and private sectors with no alternative other than to meet the increased costs, after having already carefully set their budgets for the current year.  Accordingly, it was commented that the attention of the Local Government Association and relevant Government departments should be drawn to this situation.  It was however, accepted that given the information currently available the Enterprise Agreement approach would be in the best interests of the Council and was the least financially detrimental approach.  It was therefore

RESOLVED -

That authority be given for the Director of Corporate Resources to sign an Enterprise Agreement with Microsoft at the conclusion of this Cabinet meeting.