Microsoft signs 1.5 million seat contract for Office 365 and more

England's National Health Service has inked a £774.5 million ($940 million) contract with Microsoft to license its Office 365 and security software.

The initial deal with one of the world's biggest employers is for 34 months, with the option to extend for up to a further two years, according to a contract notice published yesterday.

Reseller Bytes Software Services was awarded the contract by NHS England, the quango which runs the health service in England on behalf of the government. Scotland, Wales and Northern Ireland have their own NHS organizations.

The contract was awarded via a call-off from framework agreement RM6068, which could be worth up to £6.5 billion. It is set to end in December this year.

In a statement, Microsoft said the contract would give 1.5 million doctors, nurses, clinicians and support staff access to Office 365 – including collaboration environment Teams – and security products.

Newly appointed NHS England CIO John Quinn said the Office 365 plan would save the service "millions" annually, without providing a baseline figure. Microsoft advertises Office subscription direct to consumers at £59.99 (c $76) per year, while the NHS deal works out at roughly £100 ($136.50) per user per year.

However, the tender notice said the agreement would apply to the wider NHS under the NHSmail platform, "with scope to bring in alternative technology products over contract term."

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"We've seen huge benefits following our original agreement with Microsoft in 2020, whether using Microsoft Teams to make it quicker and easier to arrange meetings, or other digital tools that mean more time can be spent supporting patients," said Quinn, a former CIO of the Medicines and Healthcare products Regulatory Agency.

"As the NHS turns 75, this deal is part of a long history of the health service adapting to make use of the latest and greatest innovations available to deliver more productive and joined-up services for patients, and gives us a strong platform to build on for the future," he added.

According to specialist outlet Digital Health News, every one of the 42 Integrated Care Boards in England — which help to manage regional healthcare plans — will have to provide £500k ($632,000) to support the deal.

The Register has contacted NHS England to clarify the claim. ®