Israel ending licensing agreement with Microsoft

The Israeli government has decided not to renew their Microsoft software licensing agreement when their current contract with the company runs out at the end of the year.

According to the Israeli Finance Ministry, Microsoft is trying to change the current licensing agreement to a rental subscription based system which would, according to the ministry, double the price.

Israel plans to freeze the existing license structure owned by the government ministries, which may be used without further payment.

Under its current framework agreement with Microsoft, Israel pays more than 100 million shekels ($27 million) a year for the procurement of Office desktop software, Windows and server software for ministries and government offices.

The ministry also note that one of the main changes Microsoft want to implement in a new agreement is to move data to the cloud, which does not meet the government’s needs.

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Finding out what you need, how much of it and what you are willing to spend is essential according to Mikkel Næsager, Founder and CTO at Kostner.

Kostner is an IT advisory company who use AI and analytics technology to help customers find out how and where to run their IT in the most efficient and cost-effective way in the future.

Mikkel adds that the Israeli government saying no to renewing their licensing agreement shows a clear counter reaction to the trend that everything has to be cloud based.

“It shows that cloud is more expensive and some companies are now considering their needs and looking at alternative solutions like the Israeli government has done.”

“For some companies moving to a cloud service may be beneficial despite being financially more expensive but our job is to show you what other options are out there and to give our customers an overview tailor made to their needs.

“I would encourage all companies to do what the Israeli government has done and not just take Microsoft’s or any other vendor’s word for gold but get leverage and figure out exactly what it is they need.”

To learn more about Kostner and to schedule a meeting visit us here or email us at

Original article by Steven Scheer for Reuters