Leaving Microsoft, 2/7: contracts that shape the next choice

Croydon received four bids. Each answered the same request: to supply Microsoft Enterprise licences and Azure services. The London borough chose Bytes Software Services for a contract running from 1 July 2025 to 30 June 2028. The public notice describes a competition among suppliers on a national framework agreement. The software environment had already been specified in the contract’s title. ^[1]

That is where this second instalment begins. In part one, migrations exposed the connections that keep public services running. We now trace the decisions that establish those connections: defining a requirement, negotiating the scope of an agreement with the vendor, then setting the rules applied to staff accounts.

The documents reveal a gradual process. An administration simplifies its procurement and its IT. Staff learn to work in that environment, organise access within it and build services around it. When the contract comes up for renewal, keeping those services running becomes a requirement of the next purchase. The freedom to choose then depends on work done during the previous contract. These cases illuminate decisions taken at different stages, in different administrations.

Four bids within a boundary already drawn

At Croydon, price accounted for 70% of the evaluation, technical quality for 20% and social value for 10%. The published contract value was £5,754,292.88 excluding VAT. It covers the package described in the notice, comprising Enterprise licences and Azure services. It is neither a record of payments made nor a price for office software alone. ^[1]

Competition among resellers serves a purpose: suppliers compete on commercial terms and associated services within the scope set by the buyer. The notice records that competition and its outcome. It gives no detailed scores for the four bids and no comparison between Microsoft and other software environments. The architectural choice precedes the selection of a supplier.

Scope and interpretation of the figures

Notice 2025/S 000-039343, published on 11 July 2025. The contract was concluded on 24 June and runs from 1 July 2025 to 30 June 2028. The four bids are shown without identifying the bidders: the notice names only the winner, Bytes Software Services. The 70/20/10 proportions are the criteria’s percentage weights in the evaluation. They represent neither the scores awarded nor a breakdown of expenditure. The diagram describes the scope of this competition; it does not reconstruct Croydon’s original choice of Microsoft. [1]

The distinction also matters for large purchasing agreements. In October 2024, the UK’s Crown Commercial Service presented SPA24, a five-year agreement with Microsoft giving public bodies access to collectively negotiated terms. It also announced aggregated competitions among resellers and reminded public bodies of their obligation to follow a compliant procurement process. Microsoft highlighted the commercial terms, training and certifications available to staff. These are benefits announced by the parties; their statements do not measure the savings actually achieved. ^{[2] [3]}

Pooling demand can strengthen a buyer’s bargaining position. The next question is what that demand covers. Securing better terms for an existing environment and reconsidering the environment itself are separate decisions, with their own criteria and timetables.

France’s defence ministry started with an installed base

The French record shows how these decisions accumulate. In a reply to the Senate dated 24 April 2014, the Ministry of Defence described an existing Microsoft installed base and almost 3,000 purchases a year. It said it had centralised procurement to reduce differences between configurations and make them easier to manage. The ministry dated the first framework agreement to 2009 and presented its renewal in 2013 as an extension of that approach across its departments. ^[4]

Different versions, scattered purchases and several ways of configuring the same tools multiply maintenance tasks. The ministry’s reply defended a single contractual arrangement, savings and better continuity. It considered a rapid move to an entirely different environment unrealistic in the circumstances of the time. This is the buyer’s account; the reply provides no independent audit of the claimed savings. ^[4]

A preparatory note for the ministry’s information and communications systems council in February 2013, published by the free software advocacy organisation April, allows a closer look. The ministry document explains that Intradef, its network for shared services, relies on Microsoft technology. It presents standardisation as a way to simplify administration and remove software layers used to connect different solutions. It then links the financial terms to the offer’s comprehensive scope: reducing or splitting the package would put those terms in question. ^[5]

Read together, these passages clarify what was being decided. The intended savings also concerned the way the system was organised. Maintaining a compatibility layer between two applications takes work. Removing it can make day-to-day operations easier. Connecting a different application later requires checking whether the available interfaces are suitable or whether a new connection must be developed. The work depends on the chosen solution; the note puts no figure on any future cost.

The same note preserves room for other vendors and free software, and envisages studies to inform subsequent choices. The documents therefore describe a dominant environment within a varied installed base. A further ministerial reply, issued in January 2020, makes clear that usage rights remain subject to quantitative and financial ceilings. It justifies the negotiated procedure by reference to Microsoft’s exclusive position in supplying the services requested within the comprehensive offer selected. ^{[5] [6]}

The label open bar, often used in the French debate to suggest an unlimited arrangement, obscures these choices. The records examined show contractual limits, an effort to rationalise procurement and a bundled scope. They leave a question open: how much of the immediate benefit came from organising purchases better, and how much depended on continuing with the same environment? The published material cannot separate those effects into reliable monetary amounts.

A contract makes expansion easier

Microsoft’s current guides describe the general commercial model, without disclosing the particular terms negotiated by each administration. The March 2025 Enterprise Agreement guide describes a three-year commitment. For the selected products in the Enterprise Products category, coverage extends across the organisation as defined in the agreement. Those products can be ordered individually or as a package. Microsoft links this commitment to pricing terms, simpler management and a choice of on-premises, cloud or mixed deployments. ^[7]

The practical benefit for the buyer is a framework within which its IT estate can grow. Microsoft describes the true-up as an annual inventory and reconciliation of additions made during the year. Additional quantities can be used under the applicable terms; online services involve a licence reservation process. The guide distinguishes this arrangement from repeated individual orders and states that the signed agreement takes precedence over its general explanation. ^[10]

This flexibility reduces the steps needed to expand an agreed use. It also calls for oversight. The annual reconciliation establishes how much the organisation uses. Service design requires another decision: what the organisation wants to bring into that environment. For a public buyer, contractual flexibility still operates within the applicable procurement procedures, as the Crown Commercial Service’s SPA24 announcement makes clear. ^[2]

The initial definition of scope matters for that reason. Software already available, familiar to staff and covered by an agreement offers a practical route to meeting the next requirement. An alternative needs a place in the design process before settings and procedures have been built around the chosen tool. This is our analysis of the incentives these arrangements create. It does not measure a uniform pattern of behaviour across public buyers.

A staff group becomes an access rule

After signature comes a less visible operation: assigning entitlements to users. The documentation for Microsoft Entra, its identity management infrastructure, describes a useful example. A product licence can be assigned to a group. New members inherit the associated licences; that assignment is removed when they leave the group. An administrator can also disable particular services included in the product, described in the documentation as service plans. ^[8]

Consider a hypothetical group corresponding to a department in a public administration. Joining the group can give a member of staff the access intended for that department. The initial choice of what the group includes then applies to subsequent arrivals. This avoids repeating each assignment manually and makes the rules easier to administer.

What the mechanism shows

An explanatory diagram based on Microsoft Learn, consulted on 8 October 2026. Group-based licensing assigns product licences to members, with service plans enabled or disabled by the administrator. It requires available licences and can encounter errors, including conflicts between services. A user may receive entitlements through several groups or directly, so removing one assignment must be considered alongside those other entitlements. The diagram concerns access assignments. Software installation and actual use are separate operations. [8] [9]

Procurement, identity and access meet in this setting. Teams may then use the available services to hold documents or run procedures. Turning access into use remains a step to organise and observe. An assigned licence tells us neither that an application is installed nor that a service is being used.

Microsoft’s guide offers a concrete illustration of how these pieces fit together. When moving a user between two groups that provide licences, it recommends first adding the user to the destination group, checking that the new licence has been applied, then removing the user from the original group. Reversing the order can temporarily interrupt access while the change is processed. Processing times depend on the environment and workload. ^[9]

The documentation pinpoints where decisions are made: in the groups, their rules and the services they make available. To prepare for future change, an administration needs to understand these choices and the uses that depend on them. That knowledge must remain usable by the teams that later take over the system.

The court also examines the years between contracts

A case involving IBM shows how far an initial choice can reach. In June 1992, the Czech Ministry of Finance commissioned an information system for its tax administration. In 2016, a maintenance contract was awarded to IBM on grounds of technical continuity and exclusive rights to the source code arising from the original contract. The dispute reached the Court of Justice of the European Union, which delivered its judgment on 9 January 2025. ^[12]

The Court requires an examination of how the exclusive position was created and how it was maintained. It says the buyer must do what can reasonably be expected of it to allow a more open procedure. Whether real and economically reasonable means existed to end that situation forms part of the assessment. The mere fact of signing the original contract before EU law applied is insufficient to attribute the exclusivity to the buyer. The Court leaves the national court to establish the facts, taking account in particular of the opportunities to act after the Czech Republic joined the Union. ^[12]

The judgment interprets the older directive applicable to that Czech procurement. It concerns IBM and a specific procedure; it rules on none of the Microsoft contracts examined here. Its contribution to this investigation is the attention it gives to the intervening years: the origin of a dependency and the opportunities to reduce it during the contractual relationship must be considered together.

The UK’s National Audit Office offers a related organisational perspective. Its January 2025 report on suppliers to major digital programmes describes technical experts being brought into procurement too late. Maintenance or interoperability requirements can be removed as supposed savings, while teams underestimate the complexity of existing systems. These findings extend beyond Microsoft and do not constitute an audit of Croydon. They show why the people who will operate a service need to help define its contract. ^[11]

Making room for the next choice

These cases suggest a practical requirement: specify at the purchasing stage what another team will need to take over. For an administrative procedure, that may mean understanding the interfaces, having the documentation, holding the necessary maintenance rights and checking that an exchange works with a different tool. The European Commission’s 2013 guide to standards-based ICT procurement already emphasised usage rights and conformity testing. Naming a standard is more useful when accompanied by a way to assess its implementation. ^[15]

The Commission returned to this issue in its strategy for open digital ecosystems, presented on 3 June 2026. It announced an intention to embed openness, interoperability and sovereignty in project design and procurement. This is a published policy direction. Its effects will depend on the contracts, teams and implementations that follow. ^[14]

The limits of the explanation also matter. In its 2025 cloud investigation, the UK’s Competition and Markets Authority concluded that the positions of Microsoft and AWS in the public sector were likely driven by the barriers to entry, expansion, switching and multicloud use examined elsewhere in its report, rather than by public procurement practices alone. A framework agreement, a discount or a reseller contract cannot by itself explain a dominant position. ^[13]

In Croydon, four bids answered a requirement already defined in terms of Microsoft licences and Azure services. In the French defence documents, standardisation accompanied the negotiation of a comprehensive offer. In Entra, a group rule can apply the same entitlements to each new member of staff. The continuity that makes these arrangements useful also helps them last.

Preserving choice means maintaining the means to reconsider the scope throughout that period: skills, documented interfaces, suitable rights and reversibility that can be exercised in practice. Preparations for the next contract begin long before renewal is due.

Continue with Leaving Microsoft, 3/7: how licences shape cloud choices.

Sources and limits of the investigation

This investigation draws on public documents consulted on 8 October 2026. The British, French and Czech cases have different scopes and legal frameworks. The defence archives illuminate historical decisions; they do not describe the ministry’s entire IT estate in 2026. The ministry note from 2013 is available through April, an organisation that advocates for free software. Its arguments remain attributed to the institutional author. Microsoft’s guides describe general mechanisms and cannot substitute for the signed contracts. We conducted no interviews with the parties, system audits or quantitative comparisons of alternative bids. The infographics distinguish published evaluation criteria from an illustrative technical mechanism. The cover is a conceptual illustration.

1. London Borough of Croydon, Microsoft Enterprise Licensing Agreement & Azure Cloud Services, notice 2025/S 000-039343, 11 July 2025. Sections II.1.4, II.1.7, II.2.4–5, IV.1.1 and V.2: scope, duration, value, criteria, further competition, bids received and winning supplier.
2. Crown Commercial Service, SPA24 announcement, 21 October 2024, now hosted on the Government Commercial Agency website. Duration, collective terms, competitions among resellers and compliance with procurement procedures.
3. Microsoft, announcement of its agreement with the UK government, 21 October 2024. The supplier’s account, including training and certification programmes.
4. French Senate, written question 10694 and Ministry of Defence reply, reply of 24 April 2014, Official Journal p. 985. Existing installed base, dispersed purchases, chronology as presented by the ministry, standardisation and justification for renewal.
5. Ministry of Defence, Projet de contrat cadre avec la société Microsoft, note for the information and communications systems council meeting of 1 February 2013, version dated 25 January 2013, copy published by April. Pp. 1–2: Intradef, standardisation and diversity; pp. 3–4: future options and the offer’s comprehensive scope. A preparatory document, with no audited assessment of savings.
6. French Senate, written question 12547 and Ministry for the Armed Forces reply, reply of 9 January 2020, Official Journal p. 138. Ceilings, an integrated comprehensive offer and the ministry’s justification for the procedure.
7. Microsoft, Enterprise Agreement Program Guide, March 2025. Basic terms and The Enterprise Enrollment: duration, selected products, organisational coverage and deployment options. An informational guide subject to the applicable agreement.
8. Microsoft Learn, What is group-based licensing?, consulted on 8 October 2026. Overview and Features: group licences, configurable service plans, cumulative entitlements and assignment errors.
9. Microsoft Learn, Assign or unassign licenses to a group, consulted on 8 October 2026. Service selection and the sequence of operations when changing groups.
10. Microsoft, Optimizing your licensing position with the True-up process, March 2025. Additions, online service reservations, annual inventory and reconciliation, and the signed agreement’s precedence.
11. National Audit Office, Government’s approach to technology suppliers: addressing the challenges, 16 January 2025. Summary, paragraphs 17–19; main report, 3.3–3.12: technical expertise, requirements and the complexity of existing environments.
12. CJEU, judgment in case C-578/23, 9 January 2025. Paragraphs 8–17: the IBM contract and Czech dispute; 21–23: applicable directive; 30–39: creation, continuation and attribution of exclusivity, reasonable means of ending it and the national court’s role.
13. CMA, Cloud services market investigation, Appendix K: Public sector procurement, final report of 31 July 2025. K.25–28: collective agreements; K.34–38: procedures and switching; K.58: conclusion on the reasons for the leading suppliers’ positions.
14. European Commission, strategy for open digital ecosystems in public administrations, 3 June 2026. Announced policy direction for public procurement and project design.
15. European Commission, Guide for the procurement of standards-based ICT, SWD(2013) 224 final, 25 June 2013. Sections on implementing standards, conformity testing and intellectual property rights. Historical guidance on good practice, separate from current procurement rules.