Microsoft licensing: the UK strikes back

If the Microsoft deal with the UK public sector proves anything, it's that big is beautiful.

Only the combined weight of the Office of Government Commerce and the local government user group Socitm could have won such big concessions.

It's certainly possible to see the agreement as a victory for Great Britain against the Redmond bully.

Simon Moores, chairman of the Research Group, which runs the Windows Forum user group, believes the UK may even have led the way for our European cousins.

'I suspect Microsoft was actually forced into arriving at such a deal. And I suspect other European countries will take a lead form what has happened over here.

'This is a great example of government getting together. It said we don't believe we can be backed against a wall and don't think it's fair that we should accept this sort of inflated licensing that Microsoft announced last summer,' said Moores.

Socitm president Robin Carsberg says the discussions were a major achievement.

'The result achieved by OGC and Socitm working together is the first time the government sector has been able to make Microsoft listen.'

The government's aggregation strategy is likely to find a following amongst the private sector's big players.

Philip Connolly, IT Communications vice president of GlaxoSmithKline says there will be no direct impact on his company's negotiations.

But he said pointedly: 'If government has negotiated a good deal with Microsoft, we congratulate them. And we look forward to negotiating similar deals on our own behalf.'

But to view the deal solely as a coup for joined-up public sector procurement is perhaps a little optimistic. It treats Microsoft as if it were just a scaled up version of any multinational.

But Microsoft is not just another big gorilla - it's the whole bloody jungle.

An equally convincing argument is that Redmond is playing a very canny hand.

The megadeal offers the best returns if you follow enterprise agreements - standardising on Microsoft products across the whole organisation and following the upgrade roadmap dictated by the supplier.

And politically it legitimates the unpopular licensing model.

The affair has similarities to the petrol price protests of 2000. Interest groups were picked off, deals done and a seemingly unstoppable force reduced to the point where it began to look like a bunch of zealots.

You're not going to the barricades when the Empire has got the nukes and you've got, well, StarOffice.

David Roberts, chief executive of the blue chip user group The Infrastructure Forum (Tif) has been among the most vociferous opponents of the deal.

'We still believe that the price Microsoft wants to charge for desktop and server products is too high and we still believe it to be about 95% higher than before the changes - it's come down from 100% to 95% and it's still effectively double the cost.

'This has to be resisted and organisations are going to have to carry on negotiating.'

Though the ideal may be resistance, in reality Roberts may have to learn from the government's 'real politick'.

'Most member companies are negotiating strongly on corporate deals and we would like to see if what the government has done could be done privately too.'

Which leaves the real losers - the small businesses which make up the vast majority of UK industry.

Peter Scargill, national IT chairman of the Federation of Small Businesses says the public sector deal is just big business buying from big business and leaving out the little guy.

'The cost of Microsoft software is absolutely outrageous. If you're all in the same boat then that's fine, but where does government using its purchasing power leave the rest of us?

'Because Microsoft is doing business like this, there's no incentive to give discounts to the small businesses.'