Aged care services set to dump microsoft software

Microsoft faces a backlash from thousands of aged care providers and charities that are set to dump its software to avoid some $50 million in price hikes, according to a report in Computerworld Australia yesterday.

Darren Paul writes that Microsoft is pressing ahead with new global software licensing agreements, some imposing a 500% price increase, to stamp-out what it initially claimed were illegal uses of its discounted offerings by not-for-profit agencies.

He said Australian aged care and charity organisations “have sworn to dump the vendor if it enforces the policy change and are prepared to tear out established Microsoft infrastructure to implement open source alternatives.

“They argue the price hike will eat into revenue generated by taxpayers and donations for charitable activities like homeless shelters and free healthcare services”.

While the new software licence model, Charity Open, is commensurate with the 80% discount of its predecessor Academic Open, the new eligibilty guidelines could force more than 2,800 aged care facilities and still more charities onto full commercial licences.

His story quotes Paula Carleton, of Baptist Community Services, saying she is investigating how to move its 850 Windows desktops to open source following Microsoft’s decision to force it to a full commercial licence.

“Every dollar we are forced to spend on software is a dollar less, spent on the charitable services like homeless and crisis care that we deliver,” Ms Carleton said, adding that it is a public benevolent organisation according to the tax office.

“We have to understand the implications of implementing open source, based on the figures we are looking at, we would be crazy not to roll it out. We’ve been looking at the major players like Red Hat and Novell”.

Baptist Community Services has a 200% price hike through a 12 month transitory licence, starting at the end of this month, after which it must strike up an enterprise agreement or pay full commercial rates to use Microsoft products.

Its predictament is not unique, according to Aged Care Association Australia chief executive officer, Rod Young, who suggests about 85% of its members have or will be forced onto commercial licences by failure to meet the eligibility guidelines, at an estimated cost of between $50 million to $70 million.

“They have targeted the biggest providers and none of them have qualified in any way shape or form. We are fearful that the small community providers will be cut off if Microsoft interprets the criteria in black and white which it has so far,” Mr Young said.

“Half the industry doesn’t know about the licence changes, those well down the path of IT enablement, at the behest of organisations like us and the government, are intensely considering open source.

“The exclusions are a punch in the guts for us and a drop in the ocean for Microsoft in the context of its international business”.

Mr Young said any charity that provides multiple services is at a “substantial risk” of being excluded from the discounted software licence scheme.

St Vincent de Paul Society, National Council of Australia research officer, Jonathan Campton, said the price increase could not be accomodated into the organisation’s budget.

A Microsoft spokesperson told Computerworld those charities and aged care providers previously accessing Academic Open were not doing so illegally, but said Charity Open will make it “easier” for them to handle software agreements.

“A key goal of Charity Open is to enable a wider cross section of the charity sector to share in the benefits. For example, we have broadened the categories of charitable activities that are permitted, meaning a greater cross-section of charities now qualify,” the spokesperson said in a written statement.

Anglican Church chief information officer, George Lymbers, began phasing in open source across his organisation more than a year ago and has slashed more than $250,000 in software costs in combination with a collective bargining agreement.

IBM, Red Hat and Lotus Notes run alongside Microsoft products in what Mr Lymbers now describes as a good balance that keeps Windows power users happy and cuts unnecessary spend on commercial software where open source can be used.

All IT purchasing for the organisation’s schools, parishes, and retirement villages among others is done centrally under AngliConnect, which has led to a 50% reduction in the purchase cost of Microsoft software and a 50% bonus in service agreements.

Mr Lymbers said Microsoft is struggling to understand the difference between how American and Australian not-for-profits contribute to charity.

“The non-profit sector outside of government is the largest contributor of charity in the country, whereas in America large companies give mega-millions to charities. They are getting screwed here in Australia by being tarred with the American brush,” he said.

“It couldn’t have come at a worse time – during the credit crunch where charities are going to need support more unemployed. It is going to drive users away in droves into the arms of IBM and the like, and the anger will mount”.

Mr Lymbers advises organisations moving to open source to do a staged roll out, running dual boot systems and slowly phasing out the commercial software base. He said organisations may find a break-even sweet spot between commercial software and open source, or may be compelled to run an entire open source architecture, and noted that training is becoming less of a pain for transitions.

The Microsoft spokesperson said the licence conditions are designed to assist smaller standalone facilities, “as there are organisations in this sector that form part of larger affiliates and, in many respects, act in a similar manner to commercial organisations, Charity Open has been designed to provide targeted assistance to smaller, standalone aged care facilities and hospices that have access to fewer resources.

“This is to underpin the sustainability of the program for a wider cross-section of the Australian charity sector,” said the spokesperson.