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Neither Microsoft nor the NHS will confirm the value of the deal although The Times today mentioned a figure of around £500 million over the term of the contract. According to sources, this is around the same figure for a previous contract.

The fact that the deal now licenses up to 900,000 computers as opposed to the 500,000 covered in the previous agreement allows the NHS to claim that the new deal gives initial savings of £112 million over the next three years and £330 million over the course of the agreement.

The contract, which covers Windows and Office Professional only and not Windows or Exchange Server, is subject to tri-annual review to allow

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renegotiation due to changed circumstances.

Richard Granger, the Director General NHS IT claims that the deal represents 'substantial savings' over previous NHS pricing and said that 'extremely favourable terms and conditions for the NHS have been secured'.

As part of the deal, Microsoft will contribute towards a £40 million project along with iSoft and IDX, two suppliers of healthcare software. The aim of the project will be to develop common interface standards for use by NHS staff through the term of the contract. Once agreed, the interface will become a standard throughout the NHS to which all future software developed for the NHS must comply.

The new interface will be built into specially customised versions of Windows and Office as well as other bespoke software. The interface is expected to be deployed across a whole range of devices from PCs and Tablet PCs to PDAs. Microsoft promises that the customised version of Office will also provide fast access to patient records and NHS databases.

Neil Jordan, Microsoft UK's Head of Healthcare told us `The NHS project is for us to develop a complete set of design guides and toolkits with deliverables from the middle of next year although it is actually a 3-4 year programme`.