Global tech giant Microsoft is set to bill Milton Keynes Council a whopping £567,000 over the next two years in order to keep using its technology.
MK Council’s Cabinet is considering its budget for the coming year this evening (Tuesday, February 5), and the item has been flagged as a ‘high risk’ budget pressures item for the authority’s Medium Term Financial Strategy until 2023.
Budget papers put to councillors in advance of the meeting say that the council’s current Microsoft licences end on June 19.
Council officers report: “The opportunity to continue to buy multi year deals at a discounted price and capitalise is no longer available. Microsoft have changed their commercial licensing arrangements to focus on cloud based solutions and have removed the public sector discount which is impacting across local government.”
The financial impact on the council is an expected bill for £382,000 in 2019-20, and £185,000 in 2020-21.
Council leader Peter Marland admitted the council seems to be “stuck with the costs.”
He told the Local Democracy Reporting Service: “The way Microsoft does business is changing. In the past we were able to capitalise some of cost, for instance servers are physical things, but as they move to base more of their software in the cloud, we are not able to do that.
“At the same time they have withdrawn a discount they used to apply to local government so we are also paying more. I know a number of other councils have previously tried to use open-ware or cheaper substitute software, but there have been compatibility and user issues so most have reverted to Microsoft in the end.
“We have raised this nationally but we seem to be stuck with the costs.”