NORTH LANARKSHIRE COUNCIL

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1 NORTH LANARKSHIRE COUNCIL To: POLICY AND RESOURCES (FINANCE & CUSTOMER SERVICES) SUB- COMMITTEE From: HEAD OF E-GOVERNMENT & SERVICE DEVELOPMENT Subject: PROCUREMENT OF MICROSOFT SOFTWARE LICENSES FOR BOTH Date: 2 November Ref: IMcWAM I. 1 The purpose of this report is to seek approval to procure Microsoft software subscription licenses for both the schools and corporate environments utilising the Government Procurement Service Framework (RM721)- Commoditised Hardware and Software. These license agreements would commence on 1"ApriI 2013 for an initial three year period. 2 Background The Council must refresh the current Microsoft Desktop software platform before these technologies become 'end-of-life' in The current desktop operating system (Windows XP) is now nine years old with limited support for new up-to-date software and hardware. 'End-of-life' means an end to security updates, technical support, design changes and feature requests. The loss of security updates alone is a compelling reason to review our current platform; however, as increasing numbers of core business applications become unsupported on our current Desktop technologies, there is no choice but to upgrade. The Council is not alone in facing this situation which affects all users of Microsoft applications in both the public and private sector. Similar projects are currently underway in a number of authorities including Glasgow, Fife, Edinburgh, Dundee, Aberdeen City and Aberdeenshire. In addition to the above Scottish councils, other organisations include the DWP -who will finish their upgrade of 136,000 users by November 2013 and also a range of large private sector organisations. The Council therefore is one of a large number of Microsoft customers currently undertaking this major upgrade which will provide users with a rich, modern and easy to use desktop environment. Although the deadline is primarily driven by risk avoidance, the move to Windows 7 will allow us to meet the evolving needs of users within the organisation - both in and out of the office. An updated Desktop infrastructure also provides a number of advantages in terms of future improved functionality and efficiency. Examples include: 0 Improved security, greater application control, and increased hardware compatibility; 0 The ability to take advantage of nswer technologies such as virtualization; 68

2 0 Improved search for networked data repositories across the organisation; 0 Provides greater management tools for a distributed computing environment; 0 Modern deployment services with potential to: o Reduce cost of desktop management o Increase end-user productivity o Improve organizational agility; and 0 Provides improved organizational collaboration capabilities for hot desking, whiteboards, instant messaging, video conferencing, etc 2.7 Following the ICT Review and the merging of Schools & Corporate ICT this project is being managed across the whole Council estate with a project team comprising skills and experience from both schools and corporate environments. This project will result in streamlining of the technologies deployed and will improve our ability to support both environments. 2.8 This is a significant project which will utilise a core team supported by 3rd party expertise where required and our existing service delivery partner Northgate. The project board comprises the Heads of EGASD and Community Information & Learning who receive regular highlight reports on progress, risks and emerging issues. The project commenced in November and will be completed by March Discussion 3.1 As part of this upgrade we have reviewed our Microsoft licensing model. Previously the Council procured Perpetual licenses which in effect meant that the Council procured licenses outright and then (some years later) needed to buy newer licenses again. The result of this approach is a large spike in expenditure every 10 years or so, however at the time the alternative subscription licensing model was considered to be prohibitively expensive. 3.2 Microsoft licenses can now be procured in a variety of ways and a number of pricing options are available - with the schools sector having a very different (and considerably cheaper) licensing approach from the corporate side of the business. 3.3 Following an option appraisal it has been agreed that the best value approach for the Council would be to procure Enterprise Subscription Agreements (ESAs) for both the Corporate and Schools estates. This license requires an annual fee to be paid but entitles the Council to ongoing upgrades throughout the life of the agreement. The existing Perpetual license approach will continue to be used in libraries and other community learning facilities where it is not cost effective to utilise the ESA agreement. 3.4 There are a number of key benefits that can be realised by entering into an ESA including the ability to true up and true down license numbers on an annual basis. This enables the use of additional licenses during the year at no immediate additional costs. Further advantages include: 0 Roaming Use rights for Office allowing users to remotely access their software on their virtual desktops from third-party devices such as home PCs and internet kiosks; 0 The Home Use program allows employees to get the latest version of the Microsoft Office suite to use on their home computer at a very low cost; 0 When employees use the same software at home and work, they gain more skills which helps improve productivity; 0 Prices are fixed for the term of the agreement; 0 Online training for Microsoft Office software is included plus additional training and consultancy vouchers; Instant messaging capabilities come as standard; 0 Audio & Video conferencing capability is included; 69

3 4 Proposal Hot Desking capabilities providing access to application streaming will allow us to deploy business applications, on demand, to any PC; Remote sharing of desktops for conferencing; and Whiteboard facilities The Government Procurement Service (GPS) has negotiated a national agreement with Microsoft ensuring that the whole public sector obtains the best possible price, maximising the buying power of government and the wider UK public sector and ending the practice where different parts of the public sector pay different prices for the same products. In establishing such an agreement, the GPS has ensured that the process complies with EU procurement legislation and effectively sets a national 'list price' for the Microsoft range of products. It is proposed to undertake a mini competition within this national agreement utilising the Government Procurement Service Framework (RM721 - Commoditised Hardware and Software - Lot 3) inviting suppliers to bid for the supply of these Microsoft subscription licenses for a period of 3 years until 31'' March Financial Considerations 5.1 The cost of the required licenses (Enterprise Subscription Agreement for Corporate users and Enrolment for Education Solutions for schools) is estimated to be in the region of f410,ooo to f460,ooo per annum dependant on agreeing our exact requirements - for example, the exact number of our users who will be eligible for education based pricing, which specific software products we will commit to etc. The total value over the 3 year period therefore has been estimated to be f 1,400, The individual license price remains fixed for the term of the agreement but includes scope to reduce the numbers to reflect changing employee patterns within the organisation. 5.3 The costs associated with these licenses have been discussed with the Head of Financial Services and with all services and will be met from existing revenue budgets. 5.4 The outcome of the mini-competition will be reported to Committee in February Recommendations 6.1 It is recommended that the committee:- U- Head of E-Government & Service Development For further information please contact Irene McKelvey, on tel. ext NORTH LANARKSHIRE COUNCIL - PROCUREMENT REPORTING * Approve a mini-competition exercise, as outlined in para 4 above, involving all suppliers in the Government Procurement Service Framework (RM721 - Commoditised Hardware and Software - Lot 3. 70

4 Procurement Title I 'ROCUREMENT OF MICROSOFT SOFTWARE LICENSES :OR BOTH SCHOOLS AND CORPORATE USERS >rocurement of Microsoft Software Supply Services Works A H :ontract Type Term Framework Agreement Framework Contract One-off (Please note there will be ongoing software maintenance charges) Other - call off from collaborative framework agreement Y Sontract Duration Contract Start Date Contract End Date Contract Extension contract? extension being sought? 71

5 ~~ ~ t- Total Value What Procurement Route will be used? If EU Procurement Route to be used, which procedure will apply? 9 EU Non-EU Open Restricted Other - If Non-EU Procurement Route to be used, which procedure will apply? What Evaluation Criteria will be used? Procurement Checklist If Other please provide details below: 3 Open Restricted Approved List Other If Other please provide details below: Most Economically Advantageous The Government Procurement Service Framework (RM721 - Commoditised Hardware and Software - Lot 3) will be used to invite suppliers to bid for the supply of these Microsoft subscription licenses for a period of 3 years until 31 March 2016 Lowest Price U Procurement checklist provided to Procurement Manager? J Details of Council Officer responsible for this procurement process Name Alex Mitchell Telephone I