NHS deal will halve the cost of desktops

The NHS expects to sign national deals that will cut its desktop software costs by half.

The move is part of a tough value-for-money policy from director general of health service IT Richard Granger.

Ongoing negotiations with suppliers Microsoft and Sun Microsystems are likely to conclude next month, as part of the £2.3bn National Programme for NHS IT.

'We have target values we are now getting close to, that are less than half the unit costs that were suffered previously,' Granger told Computing.

The negotiations reflect a commitment to use the scale of NHS buying power to bring down prices.

'My view on software licensing is that we really need to look at what is a reasonable level of profit for the owners of intellectual property, and what the real costs of the things we are buying from them are,' said Granger.

'Most software pricing bears no relation to these factors and is more a question of what the market will bear. We know from other National Programme negotiations that if you ask hard questions you save the taxpayer hundreds of millions of pounds, which really calls into question some of the prices being paid elsewhere,' he said.

Microsoft and Sun are developing pilot versions of NHS-specific user interfaces as they fight it out for health service business.

'Microsoft understands we only want to pay for what we use, and while they obviously want to ship a bundled product they recognise some of these things don't get used by some of their customers,' said Granger.

'We may not have to make an exclusive choice of supplier - both are clearly fiercely competitive and that is to the advantage of customers,' he said.

The national contract for clinical picture archiving software is also expected to be signed within the month.

• Deputy chief medical officer Professor Aidan Halligan has been appointed as joint director general for NHS IT, to share the post with Granger.

  'My job will be to make sure everything is in and running, and Professor Halligan will deal with the people issues associated with getting it used. It is very much a partnership,' said Granger.