Defence seals Gershon-Microsoft deal

Defence seals Gershon-Microsoft deal

Summary: Minister for Finance and Deregulation Lindsay Tanner today announced that Defence had locked down its first Gershon-related procurement deal with software giant Microsoft.


Minister for Finance and Deregulation Lindsay Tanner today announced that Defence had locked down its first Gershon-related procurement deal with software giant Microsoft.

The "Volume Sourcing Arrangement" (VSA) announced today forms part of the government's so-called coordinated procurement contracting goals and was one of the recommendations that Sir Peter Gershon had given following his review of the government's $6 billion spend on technology each year.

Tanner today said he expected the deal with Microsoft to save the government $15 million each over the next four years from the contract's commencement in July.

"The Microsoft VSA provides agencies with access to substantial discounts off the price for Microsoft products and reduces the need for protracted negotiations between individual agencies and Microsoft. The discounted prices, combined with process efficiencies in the VSA, will provide a considerable cost reduction for agencies," Tanner said.

Defence was appointed by the government to negotiate such a deal with Microsoft in July last year, three months prior to the release of Gershon's recommendations, and was set to be one of the earliest changes in how the Federal Government approached technology procurement resulting from the Gershon review.

Defence in July sought expressions of interest from companies able to engage in Large Account Reseller arrangements — a deal that was won in November by Australian IT services and integrator, Data#3.

Microsoft has also welcomed the contract. "We are pleased to be able to take a leadership role for the technology industry and to sign a VSA with the Federal Government," said Microsoft Australia's managing director, Tracey Fellows in a statement.

"The agreement demonstrates our commitment to partnership, and we look forward to working with the government to further optimise its procurement and deployment of ICT resources," she said.

Topics: Government, CXO, Government AU

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • How can a captive customer negotiate?

    Without a credible investment in OSS, there is no way one can expect to negotiate with Microsoft.

    How can a captive customer really negotiate?
  • Defence policy of no defence and no Australian content

    This deal is consistent with the defence departments defacto policies of:

    1) No purchases from Australian owned organizations.
    2) Prevent the development of Australian skills and IP
    3) Keep skilled jobs away from Australians
    4) Keep 'defence goods' from actually being able to defend anything.
    5) Maximum backhanders for procurement officials.
  • Uh-huh...

    Gee - if you two put your brains together you would qualify as fully fledged halfwits. Congrats.
  • Efficiency

    Nonsense. Volume license agreements are an effective way to increase efficiency and reduce the huge administrative overhead involved with transactional licensing arrangements and license audits. The Commonwealth has made a direct cost saving for the tax payers with this agreement.
  • I like it

    Should make for some amusing situations. Refer to the recent experience in France where their air force was grounded by a virus affecting their Microsoft infrastructure. I wonder if the warship stuck on the Hawaiian shore was running Microsoft control systems. Thanks Lindsay, oh the fun we will have.
  • Get serious

    This decision will have it's benefits I'm sure but it continues the fine government tradition of "divide-and-conquer". Vendors love it and we get screwed - esspeciallythe smaller aganices who have zip bargaining power

    If the government is really serious about getting true value for money it would establsih a whole of government VSA with Microsoft.

    Even then the numbers would barely make MS breathless with excitement.
  • Uhh, RTFA?

    You realise this *is* a whole of (federal) government VSA with Microsoft?
  • They know...

    Actually they are spot-on.
    The half-wits that are "leading" the defence forces are barely competant to find their own bum with both hands.
    Consultant companies *love* the military because the income is endless.
    Locking into closed systems in this day and age is either corruption or stupidity.
  • Licensing management: a hiden cost of proprietary software

    Right, this will reduce somehow one of the hiden cost of Microsoft software: licensing management.

    But it will not suppress it as every new Microsoft software comes with tighter rules for license use.
  • Dear Mr Balmer,

    Dear Mr Balmer, if you dont't give us a "substantial discounts" off the price, then we will just, we will just ... buy them anyway.