Microsoft has signed a three-year licensing deal with the Department of Internal Affairs which could see the government save up to $119 million on its software costs.

The deal is part of the government’s broader procurement strategy, wherein its significant bargaining power is utilised to strike better deals for services like ICT and mobile voice and data, as well as other costs like air travel and office supplies.

Internal Affairs Minister Chris Tremain says the agreement offers a ‘significant improvement’ on previous Microsoft contracts.

"The terms of this new agreement are perfectly aligned with what the government has been demanding of agencies and the marketplace,” Tremain says.

"For example, it offers new and innovative licensing models based on the number of users, rather than the number of devices being licensed. Agencies can also take advantage of subscription-based licensing which, through annualised reviews, offers greater flexibility at lower cost compared to traditional licensing models.”

Chris Brice, public sector director at Microsoft New Zealand, says in tough economic times ICT is ‘an important enabler’ for public service.

"We have a 25-year relationship with the New Zealand government,” Brice says, "and this framework provides continuity and creates a strong foundation for the future.”

The deal includes software on desktop platforms like Windows and Office as well as enterprise platforms like Windows Server, Exchange and SQL Server Database.