STAFF REPORT
INFORMATION TECHNOLOGY
DEPARTMENT
DATE: April 23, 2024
TO: Justin Hess, City Manager
FROM: Kevin Gray, Chief Information Officer
By: Teresa Lord, Assistant Chief Information Officer
SUBJECT: Approval of a Three-Year Enterprise Licensing Agreement for Microsoft Licenses Through Dell, Inc.
RECOMMENDATION
Approve the renewal of an existing three-year Microsoft licensing agreement through the County of Riverside’s Microsoft Enterprise Licensing Agreement administered by Dell, Inc. (Dell), a Microsoft Large Account Reseller (Attachments 1-5).
BACKGROUND
In 2006, the City of Burbank (City) entered into an Enterprise Agreement (EA) utilizing the County of Riverside’s Master Agreement negotiated with Microsoft . Doing this allowed the City to purchase Microsoft software licenses through a cooperative volume licensing agreement. The City has renewed the three-year EA five times since its inception in 2006.
Prior to entering into the EA, the Information Technology Department (IT) procured the required software licenses from retailers bundled i nto the desktop, laptop, and server purchases. This method of procurement provided no pricing guarantees from one purchase to the next and required additional purchases for new software versions.
DISCUSSION
Key portions of the City’s core software infrastructure, software delivery, desktop security platform, collaboration applications, and the office productivity suite are based on Microsoft operating systems and are licensed through the EA. Renewing the EA provides significant cost-avoidance and positions the City to benefit from the next generation of Microsoft’s 0365 and Office platforms. The agreement also ensures that the City has access to Microsoft’s latest software technology, allowing IT to maintain current security patches, which is imperative given ongoing security threats and compliance requirements. Additional benefits of the EA include the following Microsoft applications:
SharePoint, BEN (the City’s Intranet site ), Systems Center (IT asset management and configuration system which automates deployments and allows for remote support), and Endpoint Defender (anti-virus protection suite).
IT reviewed the following options prior to determining its recommendation of renewing the current EA:
Option 1: Approve the renewal of the City’s existing EA at a cost of $2,094,774.15 over three years; receiving all benefits including ongoing software security patches, version upgrades, tier-one support, technical and end-user training, and access to Systems Center.
Option 2: Allow the current EA to expire and purchase software licenses and version upgrades at current open market prices. The cost to use licensed Microsoft software at current prices outside of the Riverside A greement would be approximately $3 .2 million; however, pricing will increase as new versions are released. Additionally, the City would lose all of the EA benefits. As a result, IT would be required to find replacement solutions to the current anti-virus protection suite, IT asset management, desktop configuration, and tier-one support.
By proceeding with option one, the initial cost avoidance is calculated at approximately $1,230,000 over a three-year period; however, long-term savings would prove to be much more significant given the amount of additional software required to replace the software benefits included in the Microsoft EA. The EA is administered through a Microsoft reseller.
Of the multiple resellers approved as Microsoft EA vendors by the Count y of Riverside, Dell offers the most significant discount, providing savings over and above that guaranteed by the Riverside contract.
FISCAL IMPACT
The fiscal impact of renewing the EA is $698,258.05 per year to be paid annually over the three-year term, totaling $2,094,774.15. These totals do not include any new purchases that may be made during the term of the renewed EA. Funds have been budgeted in the Internal Service Fund 537 (Computer Equipment Replacement Fund) for the general City portion and Fund 496 (BWP Electric Fund) for the Burbank Water and Power portion of the Agreement.
CONCLUSION
Staff recommends Council authorize the renewal of the existing EA with Dell in the amount of $2,094,775.15 for a three-year term effective June 1, 2024 through May 31, 2027 and authorize the City Manager to execute the Microsoft EA along with any related documents required for participation in the EA, subject to approval as to legal form by the City Attorney’s Office.
ATTACHMENTS
Attachment 1 - County of Riverside Enterprise Agreement Attachment 2 - County of Riverside Enterprise Agreement First Amendment Attachment 3 - Microsoft Volume Licensing Enterprise Enrollment Attachment 4 - Microsoft Volume Licensing Program Signature Form Attachment 5 - Dell Quote