Microsoft Licences (Hansard, 21 January 2004)

§ Dr. Pugh
To ask the Secretary of State for Education and Skills how many new licences for Microsoft products were purchased by schools in(a) 1999, (b) 2001 and (c) 2002; and what the cost was in each year of these purchases. [146854]

§ Mr. Charles Clarke
Information on the number of, and cost of, new licences for Microsoft products purchased by schools in 1999, 2001 and 2002 is not available because of the devolved nature of the purchasing of Microsoft products under IMS arrangements.
Information has been made available to Becta by Microsoft in respect of Microsoft's licensing sales to schools during the 2002/03 Microsoft financial year. This information is the subject of legally binding non-disclosure arrangements.
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§ Dr. Pugh
To ask the Secretary of State for Education and Skills whether, under the terms of the memorandum between Microsoft and the British Educational Communications and Training Agency, schools will continue to get licences at 20 per cent. to 37 per cent. discounts if the total aggregate number of Microsoft licences held by schools in the United Kingdom falls. [146855]

§ Mr. Charles Clarke
The discount levels in the memorandum between Microsoft and the British Educational Communications and Training Agency are based on thresholds derived from the estimated number of licenses purchased annually by schools in England rather than on the total number of licenses held. The discount levels are calculated annually in arrears and therefore the discount levels which apply in Year 1 of the agreement relate to purchases already made, are at the maximum level, and are therefore absolutely guaranteed. The discount applicable in Year 2 will relate to the number of licenses actually purchased in Year 1. The discount in Year 3 relates to the actual purchases in Year 2.
The number of licences across the UK required to qualify for the maximum discount in Year 2 and Year 3 are also based on the same numerical threshold as Year 1. Therefore, no growth in the number of Microsoft licences purchased annually by schools is required to achieve the maximum discount levels.
As Becta has a UK wide remit, it has ensured that licence volumes from the Devolved Administrations, although not taken into account in deriving the threshold, can be taken into account in meeting it, thus providing a cost advantage to schools in the Devolved Administrations, and the increased possibility that schools in England will benefit from the highest discount levels.
In the event that the number of licenses purchased by schools across the UK does not fall below 96 per cent. of the number of licenses purchased by schools in England in the year prior to the introduction of the MOU, the maximum level of discount will continue to apply. If the total number of licences sold to schools in the UK in any year of the agreement (the annual sales) falls below 96 per cent. of the number of licences purchased in the year immediately preceding the agreement by schools in England (the base year), the 20 per cent. minimum discount will be reduced as follows: if the annual sales fell to 75 per cent. of the base year sales, the minimum discount of 20 per cent. would be reduced to 75 per cent. of its previous value i.e. it would fall from 20 per cent. to 15 per cent; and if the annual sales fell to 50 per cent. of the base year sales, the minimum discount would be reduced to 50 per cent. of its previous value i.e. it would drop from 20 per cent. to 10 per cent.
These two 'pro rata' minimum discount points at 15 per cent. and 10 per cent. were introduced to minimise the impact of any reductions in the purchasing by schools of Microsoft products.

§ Dr. Pugh
To ask the Secretary of State for Education and Skills how many licences for Microsoft products are held by state schools; and what the total cost of such licences to the schools is. [146856]
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§ Mr. Charles Clarke
Microsoft has been supplying licences to schools for more than 20 years. Data on the number of licences held by state schools or their total cost are not available because of the devolved nature of purchasing under LMS arrangements.

§ Dr. Pugh
To ask the Secretary of State for Education and Skills what percentage of new licences purchased in each of the last five years by schools are OEM type licences that come outside the agreement between the British Educational Communications and Training Agency and Microsoft. [146857]

§ Mr. Charles Clarke
Information on the percentage of new licences purchased in each of the last five years by schools that are Original Equipment (OEM) type licences, is not available because of devolved nature of the purchasing of Microsoft products under Local Management of Schools arrangements
Microsoft has made information available to Becta in respect of Microsoft's (non-OEM) licensing sales to schools during the 2002–03 Microsoft financial year. This information is the subject of legally binding non-disclosure arrangements.
The Department's ICT in Schools survey provides information which can be used to estimate the year on year growth in the number of computers in schools. It is anticipated that the vast majority of these additional machines will require an OEM licence in respect of Microsoft Windows.

§ Dr. Pugh
To ask the Secretary of State for Education and Skills if he will estimate the savings on software licences following the recent agreement between the British Educational Communications and Training Agency and Microsoft; and what percentage of school expenditure on Microsoft licences this represents in each of the next three years for schools. [146858]

§ Mr. Charles Clarke
Through aggregating demand for Microsoft Licensing, Becta has been able to identify estimated savings over the next three years of up to £46 million for schools in England. These potential savings apply to all schools in the maintained and independent sectors. Additional savings will accrue to schools in Northern Ireland, Scotland and Wales. Compared to April 2003 pricing, the reduction/savings in schools' spending attributable to this deal will be between 20 per cent. and 37 per cent. depending on the actual products purchased.
The estimate of savings for each of the next three years is:

Year 1—£13 million;

Year 2—£15 million; and

Year 3—£18 million.
Taking account of the likely mix of products purchased and the licensing programmes used, the overall percentage reduction in school spend on Microsoft licensing compared with spending levels as at April 2003 is estimated to be between 30 per cent. to 33 per cent.
The calculation of these savings was made possible as a result of information made available to Becta by Microsoft in respect of Microsoft's most recent financial year and under legally binding non-disclosure 1323W arrangements. Procedures to monitor the actual level of savings achieved have been agreed by Becta and Microsoft.