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Microsoft wares may be UK public sector's only viable option

(2025/08/13)


Register debate series Not for the first time, Microsoft is in the spotlight for the UK government's money it voraciously consumes – apparently £1.9 billion a year in software licensing, and roughly £9 billion over five years.

Microsoft in the public sector

This debate series is prompted by our reporting on the [1]recent UK government commitments to the tech giant . Today's motion is for keeping Microsoft in the public sector. The debate continues with an opposing motion tomorrow.

Not surprisingly, there are plenty of voices challenging whether this is good use of public money. After all, aren't there plenty of open source alternatives?

Faced with £40B budget hole, UK public sector commits £9B to Microsoft [2]READ MORE

It's not that straightforward. There are two key factors at play.

Are the alternatives truly viable and comparable?

Technologists will often advocate for open source or even bespoke solutions. Yet the public sector hasn't had a great history of avoiding the big tech brands. NHSmail, prior to its current reliance on Microsoft tools, demonstrated some of the issues – including the cost of support, managing upgrades, and delivering new features and compatibility.

Open source also comes with a range of less measurable costs – training, over-engineering, reliability, security maintenance, data interchange and interface complexity.

It is not that open source is not viable, but rather that the true costs often only come to light over time. Rather than a panacea, open source can create unforeseen risks of lock-in and incompatibilities across increasingly integrated systems. As the links between different public service organisations become more crucial, incompatibility creates all manner of problems.

Is Microsoft a good value for money, despite its seemingly high cost?

This can be hard to judge, especially when comparing it with the many difficult-to-measure costs and benefits of open source. Perhaps more important is the way in which government acts collectively to negotiate the best deal from core suppliers, such as Microsoft, only buying (and using) that which it needs.

It is very difficult, for example, to quantify the value that Microsoft brings indirectly, including a range of support and guidance, regulatory compliance, high levels of security and trust, case studies, support expertise, innovation such as AI, and cross-sector references.

I remember being involved in the national negotiations of the government license agreements with Capita, SAP, Oracle, and Microsoft in the early 2000s, which secured much better value than individual organisations could have achieved on their own.

[3]

Today, tools from Microsoft are bought by government bodies in a variety of ways, and this needs to be reviewed. Examples include direct local negotiation, frameworks, indirect purchase through licenced partners, and via the government digital marketplace.

[4]

[5]

In 2024, the Crown Commercial Service signed a five-year deal with Microsoft, which includes access to a range of future AI-enabled technologies and associated training. How do you put a value on the access to innovation that potentially will accelerate UK government's digital progress and deliver public service efficiencies and improvements? This, Microsoft will argue, is a key driver of wider UK economic growth.

The benefits will only accrue if UK government agencies act consistently and can exploit the potential of this agreement. Procurement of all main software tools needs to be simplified and harmonised across the public sector if we are to be confident of delivering value for money, however innovative the agreement with the Crown Commercial Service may appear.

[6]

Certainly, Software as a Service (SaaS) is a good option for government, where some organisations have historically been keen to own, build, and even try to sell software, with serious downstream costs of tinkering and ‘optimising’ source code, because of the misplaced belief that the public sector is somehow unique.

The Answer?

Whilst we might not like the big IT suppliers, the public sector is not generally renowned for developing its own systems. Buying "off the shelf" (OTS) recognized and Industry standard proprietary solutions provides considerably better functionally, offers lower risks, and is more accepted by staff who use the same software at home.

Core digital and technology functions in government should be standard, using OTS software for major stuff like email and office productivity, focusing on innovative exploitation through recognised and proven tools, not using open source software.

There may be exceptions. There are also three provisos:

The contracts negotiated nationally must have fully transparent and published fee structures; contract management is exemplary – achieving outstanding value for the public; and public service organizations are accountable for how they use tools, ensuring that licencing is tracked, tools are used effectively and value for money can be demonstrated.

[7]

There is still a case for open source in specific areas, such as functional add-ons. But it should be limited and controlled, not led by the technologists, but by public sector business leaders, accountable for and able to demonstrate return on investment, benefits realization, and UK public value for money. ®

The Register will present an opposing view tomorrow and you can have your say on Friday.

Jos Creese has worked across central and local government, health, education, and non-departmental public bodies, as well as having held a variety of non-exec director roles in different industries. He has advised the Local Government Association on IT procurement and been a member of the Cabinet Office CIO Council. He has held high profile public sector IT roles, including CIO at Hampshire County Council and head of IT at Southampton City Council.

Get our [8]Tech Resources



[1] https://www.theregister.com/2025/08/07/uk_microsoft_spending/

[2] https://www.theregister.com/2025/08/07/uk_microsoft_spending/

[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aJy2lz419fmMafz2_HO1IQAAAAo&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aJy2lz419fmMafz2_HO1IQAAAAo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aJy2lz419fmMafz2_HO1IQAAAAo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aJy2lz419fmMafz2_HO1IQAAAAo&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aJy2lz419fmMafz2_HO1IQAAAAo&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[8] https://whitepapers.theregister.com/



Doctor Syntax

"Open source also comes with a range of less measurable costs – training, over-engineering, reliability, security maintenance, data interchange and interface complexity."

As opposed to assuming staff will just "know" Office etc* and be able to stumble along with Microsoft's next changes, under-engineering, MS <365, patch Tuesdays, proprietary "standards" and complexity**.

I think you make a convincing case for preferring FOSS to Microsoft.

If this Microsoft is the only viable option for public sector it is an excoriating condemnation of the public sector.

* Training costs saved here will become evident in CCed confidential data, Excel misused as a database with row limits overlooked and numerous other public sector ballsups traced back to lack of training.

** See stumbling along with Microsoft's next changes.

Wine and dine

elsergiovolador

So the takeaway here is: “Yes, we’re spending £9 billion with Microsoft, but open source is scary and only technologists like it - so let’s just keep feeding the beast.” The whole piece reads like a press release for Redmond, with the usual “hidden costs” bogeyman rolled out to justify locking the public sector into one supplier until the end of time.

What it completely dodges is the real reason we’re in this position: UK government procurement has been systematically engineered to favour multinational, tax-shy mega-corps over domestic suppliers for decades. We’ve hollowed out our own IT sector by design - killing off in-house skills, burying SMEs under procurement bureaucracy, and making sure the only companies who can survive the tender process are the same global giants who can afford to wine and dine ministers.

And while we’re handing over billions, we’re also handing over sovereignty. Thanks to the US CLOUD Act, any public data sitting on Microsoft’s infrastructure is legally accessible to US authorities the moment they ask for it - no matter what “assurances” are on the contract. So not only are we exporting the money, we’re exporting the data too, and pretending it’s “value for money.”

Standardisation could mean interoperable, open systems that empower UK-based development - but in practice it means monoculture contracts that funnel billions offshore, place public data under foreign jurisdiction, and lock us into a dependency we’ll never escape. It’s not risk management, it’s market capture - and it’s been policy, not accident.

I read this as propaganda

VoiceOfTruth

So many holes in this 'argument', but it's what I expect from those in charge in the public sector.

>> It is not that open source is not viable, but rather that the true costs often only come to light over time.

What a howler. I know it's Oracle, not MS, but... Birmingham City Council. Expected costs: £19 million. Not it looks like £130 million++.

The essence of the problem is that people like Jos Creese think they have achieved 'good value'.

Re: I read this as propaganda

LBJsPNS

Do ya really think they're going to admit "Oh shit, I fucked up big time" in public and risk their cushy jobs?

Re: I read this as propaganda

Doctor Syntax

Stockholm syndrome at its finest.

Panglossian

Anonymous Coward

"more accepted by staff who use the same software at home"

- circular argument: they use it at home because they are expected to use it at work (and they pay, directly or indirectly, for the home versions).

"public sector business leaders, accountable for and able to demonstrate return on investment, benefits realization, and UK public value for money"

- the polite response is that the voters will be sceptical on that assertion. ("Fell off chair laughing" would be the colloquial version.)

FUD! FUD! FUD! FUD!

Greybearded old scrote

Lovely FUD! lovely FUD!

I would present my counter arguments, but those above are close enough.

Filippo

> [...] the value that Microsoft brings indirectly, including [...] high levels of security and trust, [...] innovation such as AI [...]

Sir, I salute your bravery. That said, for the sake of your health, though, I advise you to stop reading this comments page. It will not go well.

Don't forget UK-specific training benefits

Anonymous Coward

Thinking of this from the point of the UK, who would presumably rather spend money helping UK people than USA people. Not that we're anti-American - I mean USA has NASA how cool is that? - but every country is supposed to prioritise its own people in resource allocation. So would you rather (a) give a billion to Microsoft for use of their software or (b) give the same billion to a bunch of UK developers to pay them to learn and improve the open source up to a professional standard.

Either way, you get software that does the job (if we assume "it's done right" in both cases of course). But with the second option, you also get a whole bunch of Brits that you've trained. Which can then be used either on that or on other projects. Whereas if you'd just given it to Microsoft, well, *their* engineers tend to be in Redmond.

There's precedent for this in Japan's KL-1 project, which was considered a failure in terms of the system it produced, but was still considered a success because of its immense value in giving training and experience to local Japanese engineers who could then go on to do other jobs in Japan. So maybe the UK needs a KL-1 like project, just try to make sure it actually ends up with a usable system as well this time as that would be a nice bonus right?

Re: Don't forget UK-specific training benefits

Doctor Syntax

"*their* engineers tend to be in Redmond."

Are they? Not in India?

This is not really an IT issue

abend0c4

The public sector is generally lamentable at procuring anything much beyond paper clips - high speed railway lines, aircraft carriers, accommodation for migrants, face masks, large buildings, ...

Now, some of those things are exceptional and it wouldn't make sense maintaining the permanent capability within the public sector to deliver them when required. However, there is a constant ongoing requirement to replace hospitals and schools and railway signalling and roads and sewers and telecommunications and so on and while you wouldn't want every last person doing those things on the public payroll it seems really remiss not to have staff in the public sector who have sufficient expertise to commission, design and oversee the necessary projects. HS2 has largely been a fiasco as it was immediately put into the hands of a specially-created company and it appears no-one was left in government with the knowledge to keep it in check.

Why aren't we building enough houses? Because we're leaving it to the private sector. In the 1950s my father worked for the architects department of a county borough. Local authorities employed architects (and, indeed builders) and that was the only way the post-war governments could deliver the promised new schools, hospitals, libraries and public housing. There were still private builders and other professionals involved, but there was a sufficient group of people, directly employed, to drive the projects forward and to maintain the expertise necessary to manage the contractors.

If the public sector needs services on a large scale over a long period of time it really ought to be operating those services itself. It already has the scale to operate efficiently and it's never gong to develop the skill to do so if it's simply handing over money to third parties and - in the case of multinational conglomerates - is funneling money overseas rather than keeping it in the UK where it will pay for local training and be subject to local taxation.

And, quite frankly, it's absurd to have a dilettante civil service in a world dependent on profound scientific and technical complexity.

Re: This is not really an IT issue

elsergiovolador

while you wouldn't want every last person doing those things on the public payroll

Fortunately government thought about that too, thanks to IR35 they don't have to worry about that. There is now no incentive to even start such a business and the usual suspects got very much permanently embedded into to labour procurement pipeline, making massive mark up, while there are still mugs going into professions knee capped by captive labour market.

Doctor Syntax

"But it should be limited and controlled, not led by the technologists, but by public sector business leaders, accountable for and able to demonstrate return on investment, benefits realization, and UK public value for money."

Good idea. When are they going to be recruited. Actually, maybe not even a good idea because the usual complaint about business leaders in general is that they're likely to be technologically clueless and apt to believe anything the salesman tells them.

Exactly

Will Godfrey

I was going to comment, but the previous commentards have already said everything I'd want to.

Hrrmph!

Anonymous Coward

> *Are the alternatives truly viable and comparable?*

Not if you listen to the M$ sales team. Yes if you go looking for someone to implement your business model and not theirs.

> *Is Microsoft a good value for money, despite its seemingly high cost?*

No. MS365 + SharePoint + Teams + Win 11 is sickening every droid in my Government Department, from middle-management down. Since we moved from traditional desktop office + on-prem networked document databases, productivity has been nosediving.

> *The Answer?*

Anybody remember David Cameron? His Cabinet Office tried hard to promote Open Standards and Software across their fellow Departments. Small lip service is now paid to standards, but software met with blank incomprehension and/or apathy. Barriers such as updating the list of approved suppliers, already 15 years out of date, proved insurmountable. The answer is; education, education, education. Oh, yes, and legal obligations. Remember that even though various Germans once tried and failed, they have subsequently felt obliged to come back and try again. France gov too has a lot more F/LOSS than UK. It's not rocket science, it really isn't any more. Time to stop pretending it still is.

> */The Register will present an opposing view tomorrow and you can have your say on Friday./*

Looking forward to the flamefest. What we need is Vulture branded popcorn!

51mes

We can spend forever goign over why the problem exsists and blame the usual suspects both in terms of the departments and the suppliers. Both are caught in that trap.

The question is now people are finally waking up and smelling the roses - how do we get ourselves (the nation) out of the challenge.

Unless one central authority builds that alternative and controls the narrative we are going to end up in a worse place. Multiple suppliers, with varying levels of compatibility he says, she says slopey shoulder support issues, and a proliferation of development training and support functions for the different variants all driving cost.

If you really think UK Government could build such a thing and develop the ability to deploy and support it at scale - whilst keeping the lights on for the current estate, without using resources from the Multinational tax shy megacorps - I have a bridge I'd like to sell you....

What this would take is nothing less than the nationalisation of the government desktop, rolled across education , local and central government with specialist considerations for areas such as defence, it's not a matter of months or even years but potentially a decade or more of effort. Is it worthwhile - of course it is I can see nothing more important than regaining and retaining our sovereignty and having control of our own digital destination as a nation. With the accompanying rebalancing of trade/investment in national rather than international resources and the retention of a skilled workforce.

At that scale and involving our institutions - there would be room for the innovation and research that we get from the mega corps, but going it alone does one thing - in these days of globalisation the fact we are not on what is effectively a global defacto standard - how will this affect workforce mobility - going for a job in Australia or the US requiring experience in the US of M365, not UK365..

There are no end of unintended consequences here.... Thankfully I'm not far from retirement so someone else can hurt their head thinking of them!

He who fears the unknown may one day flee from his own backside.
-- Sinbad