You want how much?! Israel opts not to renew its Office 365 vows

Government to cut Microsoft off at the end of 2018

Microsoft’s desire to move users into the exciting world of Office 365 subscriptions has been dealt a blow as the Israeli government took a look and said “no thanks.”

In a statement given to The Register, the Israeli Ministry of Finance explained that it currently spends more than 100m Israel New Shekels (£21.3m) per year on Microsoft’s software products.

The Government Procurement Administration (GPA) is not happy with Redmond's plans and explained:

As Microsoft is trying to change the GOI [Government of Israel] work structure and switch the framework to licensing models that do not meet the government's needs, resulting [in] unnecessary growth of the yearly government expenditure by tens of millions of shekels, the Procurement Administration decided not to renew the framework agreement with Microsoft that will be ceased at the end of this year.

Microsoft is keen to move its users to subscription models. Israel, on the other hand, has looked at its current perpetual licences and opted to stick with what it has, as it is fully entitled to do. This will, of course, mean that upgrades will eventually cease, but also means that the Ministry of Finance will not be required to pour an annual fee into Redmond’s coffers.

More ominously for the Windows giant, the GPA, along with Government ICT, “is working to locate and promote alternative technologies.”

After a bit of a wounding time of late in Saxony and Munich, one can almost hear the Penguinistas rubbing their little, stubby wings with glee.

Microsoft announced plans in July to ‘adjust’ its licencing models. The adjustment could see prices jump by as much as 15 per cent or more. The increase claimed by the GPA is a fair bit higher than that, but is likely representative of how good the original deal was.

Microsoft UK did something similar back in 2012, with its Public Sector Agreement. Back then, government departments could pick and choose from a pre-agreed price list with discounts applied to the Enterprise subscription model.

In 2015, Microsoft and the signed a Cloud Transformation Agreement (CTA), which saw Brit public sector given the option of heading cloudwards or facing a 47 per cent premium for their desktop software. Microsoft has ridden the government gravy train ever since.

Israel on the other hand, when presented with a pure subscription model and forced to commit to a larger outlay per year, has taken a step back. It reckons it does not require the latest and greatest from Redmond.

The Register has contacted Microsoft for their reaction and will update if anything is forthcoming. ®

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