RESOURCES POLICY AND SCRUTINY COMMITTEE – 15 JANUARY 2009
PART I DELEGATED
11.SOFTWARE ASSURANCE RENEWAL
(DCRG)
1.Summary
1.1This report provides details of the capital bid submitted for the Three Rivers Capital Programme 2009 for the renewal of the Council’s Microsoft Software Assurance cover. The report also looks at possible alternative courses of action.
2.Details
2.1In September 2003, the Council chose to purchase Microsoft software licences under a Select Agreement with the inclusive Software Assurance (SA) component. The decision to purchase this element of Software Assurance gave added benefits on top of the standard software licence including the ability to upgrade to the latest version of MS software during the life of the agreement without additional cost. The period of SA lasted for three years and was therefore subsequently renewed in September 2006. As the existing agreement is due to expire in September 2009, a bid for £140,000 has been made for inclusion in the 2009 / 2010 capital programme.
2.2As the Software Assurance enhancement to the standard Microsoft licence is an optional element, Members of this Committee have requested further details of the benefits and options available before consideration is given to the prioritisation of the funds through the budget setting process.
Benefits of Software Assurance
2.3The benefits of renewing the existing Software Assurance component of the Three Rivers Microsoft licences are as follows (extracted from Software vendor’s proposal):
- New Version Rights
Three Rivers District Council will have access to new versions of licensed software released during the term of the Agreement. The Council can not only take advantage of the latest technology immediately, but also reduce costs associated with acquiring new software versions.
- Spread Payments
Three Rivers District Council can make payments annually, instead of upfront payment, that will reduce initial costs and allows annual software budget requirements to be forecast up to 3 years in advance. Microsoft Finance is also available to further spread costs.
- Packaged Services
Desktop Deployment Planning Services help lower the cost and complexity of deploying the latest Microsoft Office and Windows desktop software.
- Microsoft Windows Vista Enterprise
The premium edition of Windows Vista for businesses, Windows Vista Enterprise Edition includes all features available in Windows Vista Business plus extra capabilities designed to help reduce the cost and complexity of deploying and managing corporate PCs. Windows Vista Enterprise provides higher levels of data protection, easier application management, and improved standardisation for IT operations. Windows Vista Enterprise also offers stronger data protection for a mobile workforce, including protection of sensitive data.
- Training Vouchers
Three Rivers District Council will receive training vouchers for selected courses provided by Microsoft Certified Partners for Learning Solutions (CPLS), the premier authorised training channel for delivering learning products and services. Microsoft CPLS training assists with preparation for deployment, smoother migration, and will enable Three Rivers District Council’s technical staff and end users stay up to date with the latest Microsoft technologies.
- E-Learning
Microsoft e-Learning provides access to individual, on demand Microsoft software courses. eLearning can be delivered online or offline and includes simulations, hands on exercises and learning assessments.
- Home Use Program
The Home Use Program permits end users to install Microsoft Office desktop applications on a home PC for work or personal use, increasing employee productivity and maximising investment in Microsoft Office. Each employee is able to install Microsoft products for which they are licensed in a corporate environment on a home computer for the cost of the media.
- Microsoft Employee Purchase program
The Microsoft Employee Purchase Program will provide Three Rivers District Council’s employees with significant discounts off Microsoft’s most popular productivity and consumer products. Three Rivers District Council employees will be able to order discounted products directly through an ecommerce site hosted by Microsoft.
- 24x7 Problem Resolution Support
Three Rivers District Council will be continuously connected to Microsoft for support needs in order to select the right level of technical assistance, including 24 x 7 phone support for business critical Microsoft Server products, Windows desktop operating systems and the Microsoft Office system, in addition to unlimited Web Support.
- TechNet (Technical Assistance) Subscription through Software Assurance
Provides access to TechNet Online Concierge Chat and Managed Newsgroups. In addition, a designated Council representative will also receive a single license subscription to TechNet Plus Direct, offering evaluation copies of Microsoft software as well as other technical tools and resources.
- “Cold” Backups for Disaster Recovery
Microsoft Server products and related Client Access Licences are eligible for complimentary server licences for Disaster Recovery purposes.
2.4A quotation has been sought from the existing Software provider to give the costs of procuring SA for the existing Three Rivers Licences from September 2009 onwards. The cost to cover the suite of applications currently in use is £126,187 for a three year period. This figure has taken into account a reduction of users which will occur as a result of Thrive Homes vacating Three Rivers House.
2.5When seeking a quotation, other options have been investigated. These options are detailed below:
- Option 1 - New Microsoft Enterprise Agreement with pricing based on a January 2009 purchase. Price includes a 6 months Software Assurance credit in the first year for remaining period on agreement.
- Option 2 - New Microsoft Enterprise Agreement in January 2009 and renewal in 2012. Price includes on 6 months Software Assurance credit in the first year for remaining period on agreement and a Software Assurance renewal for a further 3 years in year 4.
- Option 3 - Renew current Software Assurance in September 2009. Price includes an estimated 10% uplift and a further renewal in year 4.
- Option 4 - Take no action at the present time. Price based on 'doing nothing' now and then purchasing new standard licences in three years. A 10% price uplift has been factored into this price. The actual purchase could take place at any time and in a phased approach as and when required.
A summary of costs provided by the existing software licence provider for each of these four options is shown below:
Year 1 / Year 2 / Year 3 / Year 4 / Year 5 / Year 6 / Total PriceOption 1 / £34,596 / £52,369 / £52,369 / £0.00 / £0.00 / £0.00 / £139,335
Option 2 / £34,596 / £52,369 / £52,369 / £52,369 / £52,369 / £52,369 / £296,442
Option 3 / £126,187 / £0.00 / £0.00 / £126,187 / £0.00 / £0.00 / £252,374
Option 4 / £0.00 / £0.00 / £0.00 / £158,449 / £0.00 / £0.00 / £158,449
Options 1 and 2 spread the costs of the procurement over annual payments
Option 4 has the lowest cost in the short term and could be considered the best option if we were to make one final upgrade to our applications before the existing software agreement ends in 2009. However, costs would be incurred in future years if we choose, or were forced to move to new versions of the software in years to come. At that point we would need to buy new licences as we would no longer have Software Assurance in place. These purchases can be made incrementally as the individual upgrades are required. The figure of £158,449 shown in Year 4 of Option 4 is the overall cost if all licences were to be purchased in one go and does not include the element of Software Assurance.
2.6In the context of Shared Services, Watford Borough Council does not currently utilise Software Assurance as they factor any increased licence requirements into individual project costs. For larger implementations or upgrades, the expenditure would be identified at the start of each year.
2.7If it is agreed that new arrangement should be put in place at the end of the existing Software Assurance period, then a tender exercise will be conducted to procure the services of a software licence provider. At this point, colleagues from Watford Council will be consulted to identify any shared procurement opportunities and thereby ensure that the best value for money is achieved for both councils.
2.8If a decision is made to not support the Capital Bid for Software Assurance, then costs would be incurred at the point the Council decided to upgrade some or all of its Microsoft software. At this point in time, a coordinated approach to the procurement would be adopted with Watford Borough Council to ensure that the most cost effective supply agreement was entered into. At the point of managing this joint upgrade, consideration could be given to the option of using Open Source software as an alternative to Microsoft products.
3.Options/Reasons for Recommendation
3.1The options are detailed in the main body of the report.
4.Policy/Budget Reference and Implications
4.1The recommendations in this report are not within the Council’s agreed policy and budgets. The opinions of this Committee will have a bearing on whether the bid for funding to provide Software Assurance is included in the Capital Programme for 2009 / 2010.
5.Financial Implications
5.1A bid of £140,000 has been made for the 2009 / 2010 Capital programme.
5.2The financial implications of this report are detailed in section 2.5 and will vary depending upon which of the four options is chosen.
6.Legal Implications
6.1The council has a legal responsibility to ensure that necessary licences are in place to cover the software we use. Audit recommendations have also been made to ensure that we have suitable controls in place to effectively manage software assets and associated licences.
7.Equal Opportunities Implications
7.1Relevance Test
Has a relevance test been completed for Equality Impact?There is no proposed change to current policy / service). / No
Did the relevance test conclude a full impact assessment was required?
. / N/A
8.Staffing Implications
8.1If Software Assurance is purchased, then staff will benefit from being able to use Microsoft software on their home PCs. Staff will also benefit from the Training Vouchers referred to in 2.3.
8.2If Software Assurance is not renewed, then any staff currently benefiting from Microsoft Office home usage would no longer be entitled to this benefit and therefore need to remove the software from their home PC and return the disk.
9.Environmental Implications
9.1None specific.
10.Community Safety Implications
10.1None specific.
11.Customer Services Centre Implications
11.1None specific.
12.Communications andWebsite Implications
12.1None specific.
13.Risk Management and Health & Safety Implications
13.1The Council has agreed its risk management strategy which can be found on the website at In addition, the risks of the proposals in the report have also been assessed against the Council’s duties under Health and Safety legislation relating to employees, visitors and persons affected by our operations. The risk management implications of this report are detailed below.
13.2The subject of this report is covered by the ICT Shared Services service plan. Any risks resulting from this report will be included in the risk register and, if necessary, managed within this plan.
13.3The following table gives the risks if Software Assurance is purchased, together with a scored assessment of their impact and likelihood:
Description of Risk / Impact / Likelihood1 / Cost of Licensing with SA increases before order is placed / II / E
13.4The following table gives the risks that would exist if Software Assurance is not purchased, together with a scored assessment of their impact and likelihood:
Description of Risk / Impact / Likelihood2 / Council would fall behind market in terms of versions of Microsoft software used / I / B
3 / Reduced ability for staff to conduct work at home due to inability to use TRDC licence on home computer / II / D
4 / Removal of benefits currently received through existing SA arrangement / II / A
13.5Of the risks detailed above none is already managed within a service plan.
13.6The above risks are plotted on the matrix below depending on the scored assessments of impact and likelihood, detailed definitions of which are included in the risk management strategy. The Council has determined its aversion to risk and is prepared to tolerate risks where the combination of impact and likelihood are plotted in the shaded area of the matrix. The remaining risks require a treatment plan.
Likelihood / A / 4 / Impact / LikelihoodB / 2 / V = Catastrophic / A = >98%
C / IV = Critical / B = 75% - 97%
D / 3 / III = Significant / C = 50% - 74%
E / 1 / II = Marginal / D = 25% - 49%
F / I = Negligible / E = 3% - 24%
I / II / III / IV / V / F = <2%
Impact
13.7In the officers’ opinion none of the new risks above, were they to come about, would seriously prejudice the achievement of the Strategic Plan and are therefore operational risks. The effectiveness of treatment plans are reviewed by the Audit Committee annually.
14.Recommendation
14.1That Members of this Committee indicate their preferred option to follow at the end of the existing Software Assurance agreement.
Report prepared by:Tim Cowland, Acting ICT Manager
Background Papers
The full proposal from the existing software licence provider is available from the author of this report on request.
APPENDICES / ATTACHMENTS
None.
\\trdclgfs01\group share\committee & dmu\psc_resources\rs 2009\2009 01 15 agenda finals\09 01 15 rs i - (11) software assurance.doc.1