The NHS has placed an order worth £19.4 million over twelve-months with software and services firm Civica to implement the three-year Microsoft Enterprise Agreement across the NHS in England.

The contract covers implementing the landmark Enterprise Agreement – a three year deal national corporate licensing between Microsoft and the NHS, originally signed back in October 2001, which covers desktop and back office software upgrades.

Under the Enterprise Agreement the NHS pays an annual fixed amount subscription for three years. When the deal was signed in October 2001 the government confidently predicted that it could save the NHS £50m in software licensing fees paid to Microsoft over a three-year period by rationalising NHS software purchasing.

But E-Health Insider understands that take-up of the licensing deal by local NHS organisations has been significantly lower than originally predicted. Sources from within the service say barriers to adoption have included a lack of local awareness of the deal, and the fact that many NHS desktop PCs have to first be upgraded, or replaced entirely, before they can have Windows XP and Office XP loaded on them. One of the few NHS organisations to move entirely to a Microsoft XP operating environment has been the NHS Information Authority.

Jenny Duff, Microsoft’s Industry Manager, Public Sector, told E-Health Insider: "We believe most Trusts are now making use of the licence agreement – in order to bring consistency and compatibility to their IT infrastructure and also make use of features in the most recent additions of the software without additional expenditure."

The Enterprise Agreement covers all NHS organisations in England, including strategic health authorities, teaching hospitals, Primary Care Trusts, Acute, Community and Mental Health Trusts. Ultimately the software on 500,000 NHS desktops is meant to be upgraded by the licensing agreement.

Under the deal the number of licences taken by the NHS is not restricted, as a central annual licence fee is paid. Some 300,000 NHS users were expected to be covered in the first year, with the figures rising to 400,000 in year two and 500,000 in year three as levels of connectivity rise across the service.

Steve Reynolds, managing director of Civica Services, said: "The Agreement is an excellent option for standardising on Microsoft products, improving compatibility of software in use and reducing technical support costs."

Civica’s contracts to sell products from all other software vendors under the NHS Framework agreement will remain unchanged. The company says that it currently supplies software products to more than half of the organisations in the NHS market.