REPORT TO THE CITY COUNCIL
FROM: BRYON HORN, Director
Information Services Department
BY: FRANK D. VAWTER, Assistant Director
Information Services Department
SUBJECT
Title
Approve an increase in the licensing costs for the City’s Microsoft Enterprise Agreement in the amount of $216,658.87.
Body
RECOMMENDATION
Staff recommends that Council approve the increase in licensing costs for the City’s Microsoft Enterprise agreement in the amount of $216,658.87. The City is in its third year of a three-year agreement in which Council had previously authorized licensing fees in the amount of $3,189,931.83. The increase is the result of hiring additional staff.
EXECUTIVE SUMMARY
The Information Services Department (ISD) maintains an Enterprise Agreement with Microsoft to cover the support and licensing of Microsoft software products, including Office, Microsoft Teams, and other software tools. The term of this agreement is for three years, this is our final year on the current agreement. The increase in costs of this agreement are primarily driven by additional licenses needed for the City’s growing staff.
On March 18, 2021, Council approved a three-year agreement with Microsoft for $3,189,931.83. This agreement is based on a fixed number of staff and systems. Any licensing that is added by the City is considered a “true-up” and is paid at the time of our annual payment. The additional licensing has resulted in the total cost of the Microsoft Enterprise Agreement to $3,406,590.70, which is an increase of $216,658.87.
ISD seeks council approval for the new amount, which exceeds the originally approved spending authority by $216,658.87.
Quote Breakdown:
|
Total cost for the Microsoft Enterprise Agreement authorized by Council |
|
$3,189,931.83 |
|
Estimated funds needed for May payment |
|
|
|
Year 1 Payment |
|
$1,063,310.61 |
|
Year 2 Payment |
|
$1,125,212.97 |
|
Year 3 (Estimate) |
|
|
|
Licenses Purchase to date (Attachment City of Fresno Annual Payment 3.6.23) |
$1,201,375.12 |
|
|
Quote for projected license (Attachment City of Fresno Additional Licensing Estimate 3.7.23) |
$16,692.00 |
|
|
M365 G3 Unified FUSL GCC Sub Per User for general staff M365 F3 Unified GCC Sub Per User for Fire staff |
|
|
|
Third year estimated total due in May |
|
$1,218,067.12 |
|
Total for the three-year payment for our Microsoft Enterprise Agreement |
|
$3,406,590.70 |
|
|
|
|
|
Delta |
|
$216,658.87 |
BACKGROUND
Many organizations use Microsoft’s Enterprise Agreements. These agreements allow organizations to leverage their volume to secure improved pricing on a variety of Microsoft products, as well as establish access to Software Assurance. Software Assurance is a program that allows organizations to maintain the rights to current versions of previously purchased licenses for a fraction of the cost of the original license.
ISD maintains the City’s licensing for Microsoft products, these products include Windows, Office, SharePoint, Teams and core technology functions like file and application servers, databases servers, email servers, Intune, and Azure Active Directory.
On March 18, 2021, Council approved a three-year agreement with Microsoft for $3,189,931.83. Our total cost for the three-year Microsoft Enterprise Agreement is now $3,406,590.70, which is an increase of $216,658.87. The increase for the Microsoft Enterprise Agreement is due to an increase amount of city staff utilizing Microsoft products.
ENVIRONMENTAL FINDINGS
This is not a project as defined by CEQA.
LOCAL PREFERENCE
Local preference is not applicable to an amendment to an existing agreement.
FISCAL IMPACT
Funds for this expense are included in ISD’s FY23 appropriations.
Attachments: City of Fresno Annual Payment and True-Up Worksheet
City of Fresno Additional Licensing Estimate