Microsoft Orders UK's National Health Service To Pay Overdue Licensing Fees; NHS Presses 'Remind Me Later' Button In Response

from the ...and-sets-internal-clock-back-to-1901 dept

How adorable! The government thinks it's people!

The UK's National Health Service is apparently doing what we all do when software starts asking to apply updates or renew licenses: it's hitting the snooze button. But all that snooze tapping has apparently awoken the slumbering giant (to abuse many metaphors…). Microsoft is now demanding the NHS perform a speedy but thorough compliance check and forward all owed licensing fees to the software giant posthaste.

The tough talking comes more than a year after an organisational shift began across the NHS (April '13) saw some Primary Care Trusts and strategic health authorities abolished and clinical commissioning groups taking their place.

The company this month wrote to NHS organisations saying the overhaul made "this latest review and subsequent re-allocation necessary". It told the bodies to assess their software estate and cough for any "identified shortfall" by 30 June.
The June 30th deadline is directly related to the end of Microsoft's fiscal year. It would definitely like to see a bunch of licensing fees applied to the bottom line before it wraps up the year. Of course, this same desperation to put anything it can in the sales column for FY13 also works against its gruffly-delivered demands.

The NHS already takes advantage of the steep discounts Microsoft offers to public sector entities, which gives it a 28% discount compared to private sector prices. On top of that, more discounts may apply if Microsoft feels it can make it up in volume. Add to that the fact that the company has previously struck some pretty sweet last-minute details in late June just to rack up a few more sales for the ending fiscal year, and the NHS has absolutely no compelling reason to get right on that compliance audit.
Channel partners told us that Microsoft had talked tough with the public sector before but said this was a risky strategy, and one claimed "when the rubber meets the road Microsoft will back down"...

"Microsoft talks tough but at the last minute when it needs a deal it capitulates. Microsoft is the victim of its own commissions plans and quarterly targets. Smart buyers manipulate the situation, those that can wait for deals in June," he added.
Microsoft realizes this too, and added stronger-than-usual language to its pay-up-or-else threat, implying that existing discounts will be removed if the NHS doesn't stop acting so disinterested in paying license fees.
This is your decision but given your high risk status without action you will be asked to undertake a software licensing review. This review will start in July and if further non-compliance is identified, and commitment is not given to resolve it, you may be liable for the full amount under the commercial select level A pricing and may be subject to further compliance action".
To which the response has been a resounding "whatever." Even Microsoft knows its threats don't amount to much. Wherever this year's portion of the £500m contract (over nine years) lands, it will make an impact.
Any failure by an NHS body to hit the deadline this month will equally be a welcome boost to Microsoft's Q1 sales ledger for the next financial year.
As is the case almost every time you let a subscription lapse, the entity on the other hand will cut you a deal just to get you back on the ledger. And like everyone else everywhere, the government -- even with all its [well, not really its] money and power -- is no different. Microsoft delivers bold pronouncements and dire warnings and the NHS hits the "remind me later" button and goes back to what it was doing.

Sure, we'd all like to think that our government agencies are composed of better, sterner stuff, paying all their dues on time and never, ever throwing "YOUR SUBSCRIPTION IS EXPIRING!" notices directly into the trash, but underneath it all, every government agency is made up of people no better (and sometimes, much worse) than your or I.

Filed Under: licensing, nhs, uk
Companies: microsoft

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  1. identicon
    Anonymous Coward, 4 Jul 2014 @ 4:20am

    The NHS shouldn't be funding Microsoft anyway. It disgusts me that they do.

    Move to Linux platform. Contribute to open source and create new software where needed. It would probably be cheaper and a lot of the work for everyday computing is already done.

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