BUSINESS TECHNOLOGY MEDIA COMPANY
Companies
Sectors
Software

Govt to ditch Microsoft?


Johannesburg, 15 Jul 2011
Read time 4min 40sec

Government is making a move to end an eight-year software donation deal with Microsoft, after monetised terms were introduced.

The Gauteng Online Schools Project (GOSP) was a beneficiary of the donation programme and will not be able to afford the new terms, according to Dick Rayner, project manager at the Gauteng Department of Education (GDE).

GOSP is an initiative to build a province-wide school computer network. It aims to create 25-seat computer labs with Internet and e-mail capabilities at all public schools in the province, to be used for curriculum delivery.

Pay up

“Microsoft wants money from us all of a sudden and we don't have the budget for it,” says Rayner.

He adds that a national contract was signed in 2002 as a two-year deal for the SA Software Donation Programme. “I was part of the negotiating committee at the time. As far as I was aware at the time, perpetuity applied.”

The contract was signed for two years and then extended twice for three-year periods and eventually expired in June 2010.

“Then Microsoft announced its intention to charge us for what they've been giving us for free all this time. They're now demanding a subscription fee.”

Anti-competitive donation?

However, education lead at Microsoft SA Reza Bardien says Microsoft is surprised at this reaction since the six-year extension on the deal was given to allow the department to budget for the monetised structure.

“Moving from a free to a monetised agreement requires time on the part of the Department of Education so they can budget and this is why the extension was given. A two-year software agreement grew to an eight-year one and so we're surprised at this take.”

He adds that it was agreed after the second three-year extension that the deal would then definitely come to an end. “We were explicit that it would definitely end in June 2010.”

“It is important for Microsoft to move the department to a paying model, as per original intent, as we run the risk of being deemed as behaving in an anti-competitive manner by offering free software,” says the company.

Ramped up pricing

Microsoft has now offered provincial departments of education a ramp discount on top of academic pricing for the software.

“Academic pricing on its own is already discounted by about 75% when compared to commercial rates and on top of that there is a ramp discount structure for five years,” says Bardien.

He adds that schools have gotten quotes for about R30 000 or R40 000 through commercial retailers, but going through Microsoft it works out to about R1 000 for the entire school for year one.

The ramp structure works with the discount amount decreasing each year. In year one, the discount is 70%, in year two it's 55%, in year three it's 40%, in year four it's 25% and in the fifth year there is a 10% discount.

In year six, the departments have the choice to renew the agreement on normal academic pricing, according to Bardien.

“This offer was made to all public schools in Gauteng and this includes the Gauteng Online schools.”

Microsoft is in discussions with the GDE and was hoping to conclude these before June, but this did not materialise. It is now waiting on the department.

Meanwhile, public schools can continue to use their Microsoft software until new agreements with provincial departments are concluded. Schools do not have to uninstall their existing software, or sign individual school agreements with Microsoft in the interim, according to the company.

It says the new national schools agreement deal will include virtually free upgrades to Windows 7 Professional and steeply discounted Office Professional Plus, Windows Server and Windows CAL for public schools.

Avoiding Microsoft

Rayner says Microsoft's business imperatives are understandable, but the deal is not affordable for the GDE.

“With the academic rate and with the ramp up over the next five years, we'll end up paying R20 million to R30 million.”

He explains that the amount may not be much per school, but - when considering all 2 200 schools for GOSP for five years - it amounts to millions.

For this reason, it was proposed that the department moves schools over to open source software.

“Now there are over 1 100 schools that have changed over to open source. It's free and there are several benefits; for example, with open source we only have to install two firewalls instead of three so the Internet will be faster.”

Rayner says another advantage is evident when considering that a change to the next version of Microsoft software would force the schools to upgrade their hardware, yet with open source there is still a choice.

“There is a range of educational open source software available. Next we want to try and move all other schools over to open source. We want to avoid using Microsoft.”

The project manager says a lot of the back-office was run on open source anyway so it is only the productivity tools that need to be changed.

Login with