07.20.11

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Microsoft Contracts Run Out as National Budgets Run Dry

Posted in Africa, Microsoft at 11:58 am by Dr. Roy Schestowitz

Colourful bowls

Summary: Deficit and debt lead to cuts in the public sector, which in turn puts Microsoft out of the acceptable price range

SOME MONTHS ago we wrote about the South African dilemma and Microsoft's fight against Free software in that nation. While the budget was there, it was possible for cronies to defend Microsoft contracts, but what happens amid depression or at least a recession?

Recently we learned that the NHS is having problems signing the outrageous UK-wide deals with Microsoft. As the economy weakens in the West, it becomes harder for governments to justify just blindly renewing Microsoft deals. We are going to see more of that in years to come because national debts keep growing along with unemployment and there is public pressure to cut expenses at the federal level. Coming from the South African press we have this interesting new article titled “Govt to ditch Microsoft?” It says:

“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.”
Click here

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.

It is only a matter of time before/until the public sector widely adopts Free software (at all levels, not just operating systems) and Brazil provides an example in the sense that it’s a large nation that values libre, not just libra (gold), Microsoft has been busy trying to make Free/libre software expensive, first using copyrights e.g. (the SCO case, which still refuses to go away based on PJ’s update) and then software patents — a subject that Techrights tackles as a matter of high priority. The next few posts will be dedicated to this subject.

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A Single Comment

  1. BenderBendingRodriguez said,

    July 20, 2011 at 8:45 pm

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    Looks to me as if this Software Donation Programme was created to make M$’s software look good on paper short-term (thanks to ignoring future payments they can boast low TCO) but then people that were shot sighted will pay double, just like addicts that were given a free sample :) The worst thing is that it exist in EDUCATION!! that should be everything about educating not showing people how to get locked in a tight mind space…

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