Fremont City Council Meeting: 04/12/22 07:00 PM
3300 Capitol Avenue Div/Dept: Information Technology Services Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
STAFF REPORT (ID # 4570) DOC ID: 4570
Updated: 4/6/2022 5:54 PM by Susan Gauthier Page 1
MICROSOFT ENTERPRISE AGREEMENT - Authorize the City Manager, or Designee, to Enter Into a Three-Year Microsoft Enterprise Agreement with Dell Marketing, L.P., in an Amount of $2,694,929.49, Payable in Annual Payments, and to Execute Any Implementing Documents and Take Any Implementing Actions as Necessary
Contact Persons:
Name: Ed Miranda Sanford Taylor
Title: Information Technology Manager IT Director
Div/Dept: Information Technology Services IT Services
Phone: 510-494-4806 510-494-4802
E-Mail: [email protected] [email protected]
Executive Summary: The City entered into a three-year Microsoft Enterprise Agreement (EA) in 2019, which expires on April 30, 2022. The Microsoft EA is an annual program that covers the licensing and automatic updates and upgrades of Microsoft products including Microsoft Office 365 (Word, Excel, PowerPoint, Publisher, OneDrive, Teams, and SharePoint), Exchange/Outlook e-mail, Windows operating system, Windows Datacenter, and Bing Maps (for GIS). The new EA will allow the City to continue to use the Microsoft software products and will continue to provide access to Advanced Threat Protection, Power BI reporting and analytical tool, Dynamics 365 to create and provide application solutions , and Microsoft Azure for secure cloud storage. Database licensing (SQL Server Enterprise) and Windows licensing (Windows Server), is included in the new Microsoft EA. SQL Enterprise provides unlimited SQL Virtual Machines (VMs) on a host when all cores are licensed in a host and paired with Windows Datacenter.
The City solicited competitive bids for the Microsoft Enterprise Agreement renewal and received multiple bids. Staff recommends that the City Council authorize the City Manager, or designee, to (1) enter into a three-year Microsoft Enterprise Agreement with Dell Marketing L.P., in the amount of $2,694,929.49, payable in annual payments of $898,309.83 for Years One through Three; and (2) execute any implementing documents and take any implementing actions as necessary.
BACKGROUND: One of the Information Technology Services (ITS) Department’s priorities is to continue to provide productivity tools required for all City departments to efficiently deliver their services and for employees to perform their daily work activities. These systems include e-mail, calendar, office productivity software, online document management, and collaboration tools. The ITS Department also has an objective to deliver software solutions to City departments using a standard programming platform and reporting and analytical tools.
The ITS Department has migrated City users to the Microsoft Exchange/Outlook cloud-based e-mail system, the most current Windows 10 operating system, and the Office 365 cloud - based productivity suite. The City also uses Azure services to store critical data for storage and retrieval. In addition, the City uses data analytics tools such as Power BI for reporting and Dynamics 365 to create and provide application solutions Staff Report (ID # 4570) Meeting of April 12, 2022
Updated: 4/6/2022 5:54 PM by Susan Gauthier Page 2
The County of Riverside negotiated a Master Microsoft Enterprise Agreement through a competitive bidding process. The Master Agreement has been used by more than 900 organizations in the State of California and is the basis for the State of California Department of General Services enterprise program. As a result, the City is able to reduce the cost of the EA by combining the volume of the City’s licenses with other agencies to achieve the lowest possible cost.
DISCUSSION/ANALYSIS: The City has standardized on Microsoft products for its desktop and server operating systems and Office products including e-mail and calendaring for over twelve years. These applications are the primary productivity tools used by City employees for managing day-to-day business functions and communication. Microsoft products are the most predominant products used by cities and companies. There are limited options for other e-mail and office productivity tools, and significant staff time has been invested in learning and maximizing the tools available through the Microsoft Office suite. Transitioning to other tools would require substantial resources and training impacting employees’ efficiency and productivity.
The Microsoft EA includes Power BI reporting capabilities along with the latest versions of Office 365, e-mail and calendaring, file storage/sharing (OneDrive), collaboration tools (Teams) and encryption tools, and Microsoft Azure cloud services are also licensed under the EA.
Microsoft Enterprise Agreement (EA): While evaluating the renewal of the EA, it was important to continue to review the requirements of the City with regard to savings, flexibility to respond to rapidly changing technology, and streamlined license management.
The EA continues to allow the deployment of a common IT platform across the City and allows the mix of Microsoft cloud services and on-premise software by subscribing to the needed software and services at a set price for the term of the agreement. The EA includes Software Assurance (SA) benefits that allow the City to continue to receive the latest software versions without paying additional fees during the three-year period, 24x7 support incidents, training, and deployment assistance services for specific products.
There is simplified licensing management through the annual EA True-Up process that provides a flexible and effective way to account for any change in licensed products over the course of each year and ensures that the software licensing is current, legal and consistent.
The City solicited competitive bids for the Microsoft Enterprise Agreement renewal and received 3 bids on March 29, 2022 as follows:
Supplier Total Bid
Dell Marketing, L.P. $2,694,929.49
Crayon Software Experts LLC $2,698,214.76
Zones, LLC $2,726,862.55
Staff is proposing to enter into a new Microsoft Enterprise Agreement with the lowest responsible bidder, Dell Marketing, L.P. The EA is composed of licenses for Windows Server operating systems, Exchange server (for a hybrid cloud and on-premise architecture), Microsoft 365 user licenses (1250 user licenses for Microsoft365, eDiscovery and Defender), Staff Report (ID # 4570) Meeting of April 12, 2022
Updated: 4/6/2022 5:54 PM by Susan Gauthier Page 3
Azure cloud storage, Dynamics 365 user licenses (100 user licenses to support applications such as a citizen relationship management (CRM) system), Bing Maps (for GIS mapping) , SQL Server Enterprise core licenses and Windows Server core licenses.
FISCAL IMPACT: The total for the three-year Enterprise Agreement is $2,694,929.49, payable annually in the amount of $898,309.83 for Years One through Three. There is no sales tax on the licenses because the City receives the software license keys in an electronic format.
The actual licenses for the Microsoft software products and costs for Microsoft Azure cloud services will fluctuate based upon the City’s needs over the three-year term of the Microsoft EA. Staff estimates that there will be incremental increases for the procurement of licenses as a result of new employees, growth and demand for Dynamics 365 and for Microsoft Azure services for data storage in the cloud. In addition to the payments for the EA, the City can also expect to pay approximately $100,000 each year to maintain software license compliance and for Microsoft Azure cloud services. Those costs will be included in each year’s proposed operating budget.
There are sufficient funds for the annual software license costs and Microsoft Azure cloud services appropriated for FY 2021/22 in the ITS Operating Fund (Fund 620). Funding for the second year of annual software license costs and Microsoft Azure cloud services is included in the proposed FY 2022/23 budget. Funding for year three of annual software license costs and Microsoft Azure cloud services will be requested as part of the City’s annual budget process.
ENVIRONMENTAL REVIEW: The proposed action is exempt from and not subject to review under the California Environmental Quality Act (CEQA) because, without limitation, it is not a “project” as defined in CEQA Guidelines Section 15378(b)(5) and/or Section 15378(b)(5) and as it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment per CEQA Guidelines Section 15061(b)(3), each as a separate and independent basis for CEQA compliance.
ATTACHMENTS: None.
RECOMMENDATIONS:
1. Authorize the City Manager, or designee, to enter into a Microsoft Enterprise Agreement with Dell Marketing L.P., in the amount of $2,694,929.49, payable in annual payments of $898,309.83 for Year 1 through Year 3.
2. Authorize the City Manager, or designee, to execute any implementing documents and take any implementing actions as necessary.