Microsoft has a volume license agreement that permits companies to lease the use of software at a greatly reduced rate for a period of one year.  This new option is called a "School Agreement".   At the end of the year the District must pay for the use of the software for the next year.   This practice continues every year until the District decides to a)not use the software, b) purchase the software, c) replace the software.

All PCs that are capable of running the software are counted each year and the lease fee is paid per unit based on the number of PCs installed at the agreed on target date.

Depending on the pricing it is sometimes advantageous from a cost standpoint to enter into a School Agreement instead of a purchase.   The determination of how to purchase must be determined at a point in time.

The two decisions are treated differently on financial statements.  The purchase option would use funds for Capital Expenses while the Lease option uses funds for Operational Expenses.

1. Approve the Campus and School Agreement with Microsoft per attached contract, and

2.  Approve a District wide agreement for the use of System Management Server Clients (SMS).

Example of present decision to purchase System Managment Server (SMS) on School Agreement or License.

Purchase Option:

9000 PCs x $16.08 =  $144,720 (Upgrades available for 1 year only)

Lease Option:

9000 PCs x $2.53 x 5 years = $113,850 (Upgrades available for 5 years)

Summary: 

Selection of the MS School Agreement costs $22,770 Operating Expense in each of 5 years in lieu of spending $144,720 in Capital Expense dollars in year 1.  The School agreement in this case saves $30,870 and allows the District to use the most up to date software for 5 years instead of just 1.

Tom Moore

Chief Information Officer