Purpose

This report seeks the approval to vary and extend the contract for the provision of the Council’s Microsoft Enterprise Licencing Agreement for an extended duration of 12-months from 1 July 2028 until 30 June 2029. The new expiry date of the contract will be 30 June 2029.

The Council currently uses the Microsoft software licences to benefit from their Office 365 suite of productivity, collaboration and communication tools such as Microsoft Outlook, Teams, Word, Excel, PowerPoint, etc.

These applications and services are critical to deliver key services across the organisation for Croydon residents. The Microsoft cloud-based software has been vital in supporting Council activities with hybrid working and will further enable efficiencies and improved ways of working which are key to support the Council’s financial strategy and the Mayoral Business Plan.

Decision

A variation to the contract for the provision of the Council’s Microsoft Enterprise Licencing Agreement with Bytes Software Services for an extension period of 12-months from 1 July 2028 until 30 June 2029, and adoption of E5 licences with an estimated variation/extension value of £2,510,000 (excluding VAT).

Reasons for the decision

The Council currently supplies E3 licences for most IT users in every department. E5 licences are required to support the implementation of key technologies to support transformation activities. E3 & E5 licences enable Croydon Council workers to collaborate securely, protect sensitive data, meet public-sector compliance requirements, and work efficiently across departments and locations.

Further details about the licences are set out in section 3 and the appendix.

The rationale for this request and the recommended decision is to enable the procurement of E5 (and subsequent upgrade from E3) licences in the most financially prudent manner. The procurement of E5 licences via this ‘ramp up’ method provides a degrading discounted unit cost over a three-year period.

An E3 licence is a comprehensive Microsoft 365 subscription designed for organisations to provide secure productivity, collaboration, and basic compliance tools for everyday work. Key features include desktop and web versions of Office apps, Exchange, SharePoint and OneDrive, Microsoft Teams, core security controls, information protection, and standard compliance capabilities.

Why does the Council need to adopt E5 Licences?

An upgrade to E5 licences provides numerous benefits for both the Council and its staff. The most notable benefits and enhancements include:

·       Advanced threat protection and identity security. This significantly reduces the risk and impact of cyber-attacks and strengthens organisational resilience.

·       Strengthened controls around data loss prevention, eDiscovery, and audit. This supports compliance with UK GDPR, FOIA, and SAR requirements while reducing legal and regulatory risk.

·       Enhanced Microsoft Teams and core tools to better support secure hybrid working. Staff can collaborate more effectively, improving efficiency and service delivery.

·       E5 consolidates multiple security and compliance capabilities that would otherwise require separate solutions. The ramp?up approach delivers improved long?term value and avoids reactive future spend.

·       Improved reporting on security, usage, and system performance. This enables more proactive risk management and evidence based decision?making.

·       Probable savings from the decommissioning of services provided by 3rd parties which are replaceable with E5 functionalities such as telephony services.

More information is provided in Appendix A.

Alternative options considered

Option 

Pros  

Cons 

Comments 

1 – Do Nothing

Continue with current E3 predominant licencing agreement.

No additional expenditure incurred.

Option does not align with the current strategic objectives in CTS.

Increased risk of cyber security incidents and breaches.

Not recommended

2 – Procure E5 licences under a new and separate contract.

Potential duplication of expenditure with continuation of the current E3 licencing contract and procurement of an E5 licencing contract.

Further expenditure commitment

Potential duplication of expenditure with continuation of the current E3 licencing contract and procurement of an E5 licencing contract.

Not recommended

CDS do not have capacity to run a major re-procurement for this at the same time as several other large-scale tenders for IT infrastructure services and support which are ongoing.

3 – Extend Current contract for 1 year and uplift the contract’s valuation

Probable savings from the decommissioning of services provided by 3rd parties which are replaceable with E5 functionalities.

E.g. MiCollab telephony software  (~£100,000 p.a.)

Avoid tender expenditure.

Further expenditure commitment.

Recommended Option