NHS England spends £8M to extend Microsoft deals by a month

NHS England spends £8M to extend Microsoft deals by a month

A good day at the Office for the Windows giant, with the interim measure used to allow more time for replacement agreements to be confirmed.

Published on 25th May 2023

England’s health service has stuck two deals to extend its Microsoft licensing terms for just one month at a cost of around £8 million ($9.9 million).

Reseller deals with Insight Direct and Bytes were set to come to a close at the end of April, but both have been extended until the end of May to allow more time for replacement agreements to be put in place.

The contract with Insight Direct is a £3.47 million uplift to a £77.8 million ($96.8 million) deal launched in 2020 covering Microsoft products including Office 365 and Power BI, and was signed on April 26, according to a procurement notice.

A similar one with Bytes relates to a variety of Windows products and bags NHS England a month extension till May 31, at a cost of £4.6 million on an overall licensing agreement worth £163.1 million ($203 million), another notice said.

The extensions may reflect the complexity of renegotiating licenses upon which the NHS is utterly dependent. Observers will question whether the NHS couldn’t have got a better value for the £8 million extensions, given that they appear to have been negotiated in haste.

NHS England has been contacted for comment.

Microsoft, on the other hand, may feel it was a good day at the Office. It has imposed a salary freeze for full-time employees this year, owing to a “competitive environment while also facing global macroeconomic uncertainties,” according to CEO Satya Nadella.

Of course, Nadella’s own remuneration is set by the board. Last year it was revealed that he was getting a 10 percent pay rise to reach $55 million. Or more than one thousand times the salary of the average NHS nurse.

In the NHS, negotiations over nurses and doctors’ pay continue in a process fraught with industrial action. Unions claim real-term pay has fallen between 8 and 26 percent, and nurses recently voted to reject a 5 percent pay rise.

Estimates suggest NHS England will post a combined deficit of around £600 million ($747 million) on a budget of around £160 billion ($199 billion) for the current financial year while Microsoft’s net income for 2022 was $72.7 billion on revenue of $198 billion.

An NHS spokesperson said: “These national agreements to use Microsoft products have already saved the NHS hundreds of millions of pounds in recent years. They have been extended to allow extra time to complete a full procurement process which will also save money in the long-term for taxpayers.”


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