Chest cuts discount deal for MS

August 13, 1999

Oxford University and higher education's software negotiator Chest went shopping Europe-wide for the best deal on Microsoft software - and they found it close to home in London.

Chest software team manager Mark Summerfield said other universities could now piggyback the deal, struck with reseller Sanderson MSL. "Because we represented the community, no other institution has to go to European tender, whether or not they buy from Sanderson MSL."

Oxford wanted to rent Microsoft Office and other software under the recently revised Campus Agreement scheme and decided to invite tenders in the European Journal. Organisations receiving government money are required to do this if they intend to spend more than ¤200,000 (Pounds 133,000) over a three-year period.

Mr Summerfield said: "Oxford felt that legally they were obliged to do it. We asked if we could participate with them."

Microsoft's education group manager Mark East said: "Campus Agreement pricing is the same across Europe. Any reseller can supply it in Europe. It makes no difference to us." Microsoft harmonised its educational prices across the European Community on July 1. Ignoring exchange-rate effects, any saving that institutions achieve by a European tender will erode the reseller's profits, not Microsoft's.

Chest and Oxford's main concern was to get the best possible discount on Microsoft's recommended-price formula.

In post-tender negotiations, the buyers and Sanderson MSL agreed a modified formula that is no longer equivalent to a straight discount on the Microsoft formula. This formula has not been disclosed, but would-be customers can compare the recommended and discounted prices on Chest's online price calculator.

Campus Agreement, a rental scheme that originated in the United States, was met with suspicion when Microsoft introduced it to the United Kingdom in November 1998. Version two of the agreement, launched in the UK last month, incorporates several changes that were demanded by Chest last year, including easier buyout from the scheme and more favourable terms for small institutions. However, Chest still lists five issues that institutions should consider before they buy.

Mr East said: "Since we announced Campus Agreement version two in July we have signed eight agreements, making a total of 37. We are very pleased with the acceptance it has received."

Microsoft believes some institutions are choosing Campus Agreement rather than the older Select scheme because it includes an upgrade to the Windows 2000 operating system, set for release at the end of the year.

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