Australian Government pays less for tech

The Australian Government has volume-sourcing deals with Microsoft and other providers, meaning that it pays less than 50 per cent of the cost with which Australian consumers are slugged, the IT pricing inquiry has heard.

The deals, which cover the whole of the Australian Government — that is, around 250,000 users and 290,000 devices — have been in place since 2009 with Microsoft and 2010 for desktop hardware, with the aim of reducing governmental costs. The deal with Microsoft, which was expected to save AU$60 million over its four-year lifespan, has now saved the government over AU$82 million.

The Desktop Hardware plan, as outlined by the government CIO in the Australian Government Information Management Office's (AGIMO) submission to the inquiry (PDF), also gives the government significant discounts.

The Australian Government is now paying more than 50 per cent less than the Australian market average for standard desktops, and more than 25 per cent less for standard laptops. Benchmarking, using average pricing data provided by Gartner, demonstrates that savings in excess of AU$20 million have been achieved as at 30 June 2012.

The submission then noted that governments — not consumers — are able to achieve competitive pricing when it comes to hardware.

The relationship with Microsoft, however, is less satisfactory, as Microsoft does not deal directly with the government, instead farming that task out to a third-party reseller. This means that the Australian Government is still paying 50 per cent more for Microsoft products than the US government.