The UK government is advising schools in England to press pause before signing up to a three-year licensing agreement with Education Software Solutions (ESS).
As we revealed earlier this week, ESS – formerly owned by Capita but sold to Montagu Private Equity last December for £400m and now in the same group as ParentPay – told clients it is making changes to its SIMS (schools information management systems) Annual Entitlement Plan by "extending" the agreement to 36 months.
Some school techies were outraged by this and leapt on the Edugeek forum to discuss it. Now the Department for Education has stepped in to advise.
A spokesperson for DfE told The Register: "We are aware that ParentPay Group has sent a letter to multiple schools and Academy Trusts about automatically extending their management information system (MIS) contract from one year to three years from February 2022.
"We are looking into this and would encourage all schools to pause before agreeing to this new contract whilst we investigate."
A SIMS customer said the DfE's stance was "welcome news if the DfE act promptly (and it sounds like they are). However, if the outcome is to slap ESS with a negligible (compared to income from 3 year renewal) fine a year from now, it's not much use to schools who need the issue resolved soon.
"Most of the schools I talk to have paused all contracts pending ParentPay backtracking on the 3-year insistence and/or going out to tender," they added.
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Among the comments on the EduGeek forum – which at the time of writing stretches to 13 pages of chatter – were some where IT pros talked about needing to run a tender process before they move to three-year licensing contracts. The term lock-in was also mentioned.
According to the Competition Markets Authority, which waved through Capita's sale of ESS to Montagu, SIMs market share in schools was 70 per cent to 80 per cent in 2020, down from 80 per cent to 90 per cent in 2017.
It said in its July decision [PDF] that "evidence indicates that schools are increasingly willing to switch from SIMS' MIS to cloud-based alternatives. Market feedback indicates that this has been predominantly driven by academies and [multi academy trusts], who have greater autonomy regarding their choice of supplier. However, some [local authorities] have also provided schools with greater flexibility to choose MIS provider and switching has occurred where this is the case."
Mark Brant, CEO at ParentPay, sent The Register a statement saying its decision to move to a three-year agreement was "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 added: "Both in our direct communications and on our contracting portal, we have explicitly given our customers the choice as to whether to agree to the new terms. On 1st February 2022, a new agreement will be created for customers who have not proactively engaged via the contracting portal, and they will again be given choice as to whether or not to proceed.
"At every stage, we have been clear with our customers to let them know that, as is standard practice in our industry, they will need to actively let us know if they wish to agree to our revised terms. Any customers needing help with the contracting portal should please get in touch with us." ®