Navy seeks servicewide deals to cut software license costs

The Navy is working to negotiate as many servicewide license agreements as possible
with its existing software vendors to get the lowest possible prices on software,
maintenance and support.

Navy and Novell Inc. in late January signed the Navy's first-ever enterprisewide
licensing agreement, which covers all Novell products on the General Services
Administration schedule. The multiyear agreement includes maintenance and telephone
support for the Navy and Marine Corps.

The service is also close to an enterprisewide license agreement with Microsoft Corp.
for network operating systems and other software at a bundled price, Navy and Microsoft
officials said.

The Navy is negotiating with other vendors, including Lotus Development Corp. and Sun
Microsystems Inc., to consolidate and update existing license agreements for use
throughout the service, Navy officials said.

The Navy considered using blanket purchasing agreements, but the service instead is
trying to consolidate existing licensing agreements, Navy officials said.

The Navy's Office of the Chief Information Officer is handling the negotiations. To
gauge its buying power, the service recently conducted a survey to determine what software
is used in Navy offices.

The Novell agreement lets Navy buyers pay less for large orders, said Mike McLaughlin,
Novell's director of federal markets. Because the Navy has 275,000 to 400,000 Novell
product users, he said, the service would save about 30 percent to 40 percent by shifting
to the enterprisewide license.

"People who have bought under different licensing vehicles from us, such as 8(a)
vendors, can now bring to bear on this one contract," McLaughlin said.

The Navy until now bought Novell software "shrink-wrapped, on a per-copy
basis," he said.

When Navy commands, such as the Space and Warfare Systems Command, bought Novell
products, it was through indefinite-delivery, indefinite-quantity contracts, such as
Unified LAN Architecture II and PC LAN+.

If it reaches an agreement with Microsoft, the Navy will see the price of software
upgrades drop and will be able to buy in volume, Navy officials said.

"We're discussing a variety of deals with the U.S. Navy," said Keith Hodson,
spokesman for Microsoft Federal Systems Inc. "We're interested in any enterprise
business the service can provide, but it would be premature to discuss site

Hodson said, however, the deal would put the software in the hands of more than 250,000
users throughout the service. Pacific and Atlantic fleets use many Microsoft products for
the Navy's Information Technology for the 21st Century initiative.

For IT-21, the Navy selected Microsoft Windows NT 4.0 Server as the standard NOS and
will move to NT 5.0 when it becomes available. For IT-21, the service also will use
Microsoft Outlook 97, Microsoft Image Composer and Microsoft BackOffice.

Microsoft Exchange 5.0 is the standard e-mail package for both fleets; Microsoft Office
97 is the standard office suite.

The products covered in the enterprisewide licensing agreement conform to the Navy's IT
Standards Guidance. The draft document lists standards for hardware, software and services
throughout the Navy.

The document lists products that comply with the Defense Information Infrastructure-
Common Operating Environment, products with potential for compliance and products that
Navy users ought to avoid.

The Navy CIO Board of Representatives will meet later this month to approve the

Navy officials said the document, which they will update quarterly, provides a
five-year IT road map for the service.

A joint message from the Pacific and Atlantic fleets established interim IT-21
standards in March. But ITSG will provide guidance throughout the Navy.

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