The New Zealand State Services Commission announced on Tuesday that it had been unable to reach an agreement with Microsoft for a new whole-of-government contract.
"It became apparent during discussions that a formal agreement with Microsoft is no longer appropriate," the commission said in a statement.
The existing agreement begun in 2000 allowed New Zealand's public-sector agencies to purchase Microsoft products on an opt-in basis.
All is not lost for Microsoft, as it has agreed to provide pricing certainty for agencies as a basis for individual agency negotiations, and the State Services Commission for its part has said it will be "supporting agencies to explore how they can maximise their ICT investment and achieve greater value for money".
Earlier in the week, the New Zealand minister for internal affairs announced a move towards shared services and Edwin Bruce of the State Services Commission (SSC) pulled out of giving a keynote speech at the conference, with an SSC spokesperson saying the commission was going through a "transition" so it would be premature for Bruce to comment.
The move runs contrary to similar purchasing initiatives in Australia's Federal Government, which has recently inked a new whole-of-government purchasing deal with Microsoft, led by the Department of Defence.