NHS pays £46K to prep next Microsoft licensing round

Benchmarking contract lays groundwork for renegotiating £774M software agreement

NHS England is spending £46,000 on "benchmarking" as it gears up for what looks like the next round of negotiations behind one of the UK public sector's biggest software deals.

A newly published notice shows that NHS England has hired IDC to provide "benchmarking and advisory services" on software licensing and pricing via the G-Cloud 14 framework.

The contract runs from April through August and is tied to "preparation for large-scale software licensing procurement," which is about as close as the document gets to saying what this is really about.

No vendor is named, which is typical for this kind of notice, but it doesn't take much guesswork. NHS England already has a national Microsoft licensing deal covering email, Teams, and related security tools for roughly 1.5 million staff. That agreement was signed in 2023 and is delivered via reseller Bytes Software Services, with a value of about £774 million.

With that in mind, a £46K spend on benchmarking starts to look pretty minor. This is the sort of groundwork that happens before anything formal kicks off, or before someone picks up the phone to start talking numbers again. Mostly, it's about figuring out where things stand now: what others are paying, what's changed in licensing, whether the NHS has any room to push this time, or if it's stuck taking what it's given.

In other words, NHS England is paying IDC to tell it whether it's getting a good deal before it goes back to the negotiating table for what could be another nine-figure agreement.

The timing suggests this is early-stage groundwork rather than an imminent procurement. The current Microsoft arrangement still has runway, but large public sector contracts tend to involve long lead times, particularly when they span multiple organizations and underpin day-to-day operations across the health service. Even small percentage changes in pricing or licensing terms can translate into tens of millions of pounds over the life of the contract.

For now, NHS England's £46K spend is a rounding error in the context of its overall IT budget. It does, however, point to something much larger on the horizon. ®