A "memorandum of understanding" has been signed between the software giant and the British Educational Communications and Technology Agency (Becta) to cut the licensing fees, which the two are predicting will save English schools around £46m over three years, with those in Wales, Scotland and Northern Ireland saving between US$4.2-5m.
The aim of the deal isn't to change schools' buying habits apparently -- they are still free to purchase the software of their choice, although the reductions might be difficult to resist for cash-strapped institutions -- but the scheme will cut down the expense for those that opt for Microsoft products.
The deal will take effect from 1 January 2004, having been agreed after "complex and difficult negotiations".
David Burrows, Microsoft's director of education, told silicon.com that the software giant is simply acknowledging the importance of the education software market. "Education invests a lot in ICT and they weren't persuaded it was best value... the deal is recognition of resources being tight and the value of the market. It's a good deal for us and a good deal for schools," he said.
While Microsoft might be "giving something back", you could be forgive for asking "what's in it for them?" -- a chance to start users on the path away from Linux early perhaps? Not so, according to Burrows. "This isn't a plot," he told silicon.com. "Children have a choice -- and most are very savvy about what they use. Teachers have told us they want to be using our software. It's very popular, the children's parents use it, they'll use it at work. We're just recognising the popularity of our products."
Simon Tindall, head of education and research at Sun, isn't taken with the Microsoft-as-fairy-godmother story. "It looks like a trumped-up volume agreement," he told silicon.com. "It doesn't mention the cost -- how much they still have to pay -- to get those volume discounts. It's the old saying, you can't put perfume on a pig -- it's still a pig."
Tindall thinks the deal is Microsoft's attempt to attempt to sew up the education market, even if it means lower profit margins, and put the mockers on the growth of open source and other competition. "In the longer term, they're concerned about the growth of open source and interest in Linux and Java -- they're trying to snub them out. They want to perpetuate the status quo," he told silicon.com. "It borders on the anti-competitive."
Gates and co won't be relinquishing their hold on the education market just yet, however. In the pipeline for Microsoft's educational arm is a continuous development programme for teachers and an online forum "by teachers for teachers".
Silicon.com’s Jo Best reported from London.