Education Software Solutions tells school customers: We are moving to 3-year licensing contracts and so are you

Some punters not happy with former Capita-owned biz, now under control of Montagu Private Equity

Updated Education Software Solutions – a one-time Capita-owned school software provider now under the control of Montagu Private Equity – is being marked down by customers for moving to minimum three-year licensing contracts.

Sold in December for £400m, ESS has become part of the same group as ParentPay, run by CEO Mark Brant, who wrote to school customers last week.

"We trust you are beginning to enjoy a more settled academic year," the letter seen by The Reg states. "The pandemic has had an impact on all of us, especially pupils and those responsible for their learning and development. As we closely return to our normal routines, it is time to share updates from within ESS and explain the simple actions for you to continue using SIMS - the UK's leading MIS [management information system] for schools."

For the uninitiated, SIMS (school information management system) is a client server architecture, with a back-end built on Microsoft SQL Server. The business logic is managed by a tailor-made .NET Framework module and the client application is also constructed with .NET. It was released in 1984.

As of October 2020, between 70-80 per cent of UK schools use SIMS though this represents a fall in market share from 80-90 per cent from October 2017, according to data provided to the Competition and Markets Authority when it was considering the sale of ESS to Montagu.

The letter reminded customers that ESS is now part of the ParentPay "family", and the new owners are committed to "invest many millions into the future of SIMS. We are now actively preparing to deliver new and enhanced features for SIMS."

"We will also bring greater consistency and focus on our communications and training material, enabling you to extract the maximum benefit from SIMS."

And then came the talk of "Moving to three-year contracts" and attempts to justify it by describing the delivery of "best-in-class solutions and increased value to users."

"[W]e are making changes to your SIMS Annual Entitlement plan. We are extending the length of the agreement to three years, giving you the certainty of a fixed cost for the first year and a capped price increase for years two and three. The revised agreement provides full access to the enhancements we're making to SIMS, including the 'Next Gen' software feature sets. These improvements to SIMs will be available at no extra cost."

The letter isn't explicit about the new features but mentions helping schools and school groups "transform" the way they use MIS; "redefine how they leverage data"; and allowing users to be "enabled 'anywhere, anytime' [to] access to school MIS."

These new features are expected to be in place by "early 2022", the letter states.

One techie contact at a school that uses SIMS said the move to three-year agreement was an "ill-advised". He said schools are more willing to use cloud alternatives and were given by more flexibility on supplier choice by Local Authorities.

Others leapt onto the Edugeek community forum to voice their displeasure at being asked to move to longer contracts, with many saying they only want to renew it for 12 months amid plans to move to a new MIS. The chatter on the forum spreads across six pages.

"That is incredibly poor. We don't want to sign up to a three-year commitment. Doing so would require us to go to full tender due to the value of the contract," said user localzuk.

In response, paulkerton said: "Well, there would be a certain irony to a company deciding to push everyone to a multi-year contract in order to try and secure themselves ending up forcing everyone into a competitive tender situation rather than their actual intention to keep their market monopoly."

Another said they were informed that if their portal process under the renewal was not complete by 1st February, "an agreement will be generated for existing products with a 3 year term."

"They're attempting to lock schools into a three year contract, with no apparent option for renewing for the standard (12 months) term. For many schools that puts the contract over the tender threshold and requires them to compare the incumbent to alternative providers (Bromcom, Arbor, etc)," added localzuk.

The Competition and Market Authority frowns upon aggressive renewal tactics. Earlier this year it rapped the knuckles of the antivirus vendor community, specifically McAfee and Norton, and put guidelines in place.

However, ESS contracts relate to schools and so are not classed as consumer contracts, meaning the laws that the CMA enforces do not apply here.

We asked ESS, CEO Brant and the Department for Education to comment. ®

Updated at 14.59 on 19 November 2021 to add:

Mark Brant, CEO at ParentPay, sent us a statement to say that while "customers continue to respond positively to the new agreements, we sincrerely apologise if our most recent communication on the new SIMS renewal terms has been a cause for concern.

“We have communicated to our customers the need to move our core SIMS contracts on to a three-year term, mirroring the approach taken by a number of our competitors for many years. Longer agreement terms are increasingly standard practice in our sector and allow suppliers to commit to sustained investment programmes, which translate into better products for schools. Until now SIMS was very much the anomaly."

He said that when buying ESS, ParentPay Group committed to re-investing "every penny of post-tax earnings back into the business for at least the next four years in a multi-million pound investment.

"Should schools choose to progress with the revised agreement, they will benefit from access to our Next Gen software features from early in 2022, have surety of supply and longer-term price certainty."

SIMS, Brant added, is "already available as a cloud solution" and a number of schools are using it. "To suggest the contrary is fundamentally incorrect". From the first calendar quarter of next year, it will offer "enhanced browser-based access to all existing SIMS features, via a new hosting solution called SIMS Connected". This will be a cost-effective and performant alternative to SIMS on premise".

"Next Gen Project will deliver all the benefits of the leading MIS, future proofed without the risks and costs of a disruptive wholesale migration. We will deliver pure cloud-based improvements to SIMS to sit side by side with the classic SIMS features, giving users the opportunity to move across at their own pace. Next Gen will retain the breadth of 3rd party integrations that are a valuable part of the SIMS ecosystem and differentiate SIMS from alternative MIS providers.”

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