2004/0393
Wednesday 3rd November 2004

NHS in Ground-breaking Deal with Microsoft - Improving Patient Safety and Value for Money

The NHS has reached a landmark agreement with Microsoft on the renewal of the licensing of its desktop products in line with the OGC's framework agreement with Microsoft. It will mean improved patient safety as NHS staff will continue to use familiar software reducing the possibility of error; retraining will be unnecessary and it will mean an estimated cost saving of £330m on the current deal, Health Minister John Hutton announced today.

The arrangement will allow the NHS to use up to 900,000 licences, compared to the current 500,000 with the licences being held on a perpetual basis rather than being renewable annually.

The arrangement will last for nine years, with break points at three-year intervals, which will allow for renegotiations in the event of unpredicted pricing or product shifts in the market place. There will be initial savings of £112m over the next three years, and in excess of £330m over the length of the contract. The option to use Open Source software in the future remains and continues to be evaluated.

The Secretary of State for Health, John Reid, and Richard Granger, Director General NHS IT, met with Microsoft's Bill Gates earlier this year to discuss Microsoft's involvement with the NHS. The formal agreement was reached after discussions led by Richard Granger and Steve Ballmer, Chief Executive Officer of Microsoft Corp.

John Hutton said:

"This is an exceptionally good deal for the taxpayer that genuinely reflects the buying power of the NHS and our commitment to value for money procurement.

"NHS staff will have access to the latest desktop software. This supports our drive to help modernise the NHS through sound investment in 21st Century technology."

Richard Granger, Director General NHS IT said:

"The NHS is in a uniquely strong position as an IT customer, currently the largest procurer of IT services in the world. This agreement illustrates Microsoft's commitment to supporting the needs and demands of one of its most important customers.

"It represents not only substantial savings over both previous NHS pricing but also that of other public sector purchasers. Extremely favourable terms and conditions for the NHS have been secured."

Richard Granger added:

"We have robust methods in place to validate the usage of the Microsoft products under this agreement which we will use to confirm the exceptional value that this deal delivers. Microsoft's commitment to £40m of research and development under this agreement will result in guidelines and toolkits to allow independent software vendors to deliver an NHS-specific user interface - a welcome development."

Terry Smith, Senior Director of Public Sector, Microsoft Ltd, said:

"The National Programme for IT is set to make a great impact on healthcare provision and patient care in the UK. By putting the latest software in the hands of clinical professionals in a cost effective way through this agreement, Microsoft can help reduce costs and support these improvements.

"This License agreement puts in place a framework that, over the life of the deal, will allow greater time and resources to be applied where they are needed most; into patient care. This is good for patients, healthcare professionals and the NHS as a whole."

ENDS

For further information:

Department of Health press office
David Hands 020 7210 5896

Microsoft
Scott Thomson 020 7344 1263

Microsoft Press Centre
0870 20 77377

Notes to Editors

1. The National Programme for IT is an essential element in delivering the NHS Plan. It will create a multi-billion pound information infrastructure, which will improve patient care by increasing the efficiency and effectiveness of clinicians and other NHS staff. It will do this by:

• creating an NHS Care Records Service to improve the sharing of consenting patients' records across the NHS
• making it easier and faster for GPs and other primary care staff to book hospital appointments for patients
• providing a system for electronic transmission of prescriptions
• ensuring that the IT infrastructure can meet NHS needs now and in the future

2. A separate news release about the research and development by Microsoft of a health specific user interface for clinical systems in the NHS is available.

For further information on the National Programme see www.npfit.nhs.uk