Staff Report.Microsoft Licensing Dell
PREPARED BY: Sai Kim
IT Manager
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 06/21/2022 ITEM NO: 5
DATE: June 2, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute a Three-Year Agreement with
Microsoft to Purchase Software Licensing Through Dell Technologies in an
Amount Not to Exceed $250,000.
RECOMMENDATION:
Authorize the Town Manager to execute a three-year agreement with Microsoft to purchase
software licensing through Dell Technologies in an amount not to exceed $250,000.
BACKGROUND:
In June 2019, the Town executed a three-year Microsoft software licensing agreement which
expires on June 30, 2022. A new agreement is required for the Town’s continued use of
Microsoft products and secures pricing for the next three years. Payments are made annually
after a license true-up assessment is made each year.
DISCUSSION:
The Microsoft software licensing agreement covers licensing for server operating systems,
server management, server applications, Office 365 services, and security software on both
staff accounts and in the cloud.
In accordance with the Town Purchasing Policy Section XVII regarding Cooperative Purchasing
Agreements, the prices for Microsoft software license renewals are negotiated by the County of
Riverside and sold by volume licensing partner Dell Technologies. Most California agencies,
PAGE 2 OF 2 SUBJECT: Dell Technologies Microsoft Software Licensing DATE: June 2, 2022
DISCUSSION (continued):
from large ones such as the Department of Motor Vehicles to small cities and special districts,
use this cooperative purchasing arrangement to obtain the best prices.
The Town’s current Microsoft software licensing agreement is valid through June 30, 2022. The
new agreement is a means of securing pricing for the next three years through June 30, 2025.
The annual payments may fluctuate from year to year since our license count may change over
the course of a given year. The annual license true-up assessment will help determine the
annual payment for the given year. Our anticipated annual payment for the first year will be
$78,017.33. Dell Technologies is the vendor the Town would purchase the license through, and
the agreement is with Microsoft.
An interruption in Microsoft licensing software would halt the daily computer operations of
Town staff.
CONCLUSION:
Staff recommends that the Town Manager execute the new three-year Microsoft software
licensing agreement through Dell Technologies in an amount not to exceed $250,000.
COORDINATION:
The Finance Department, IT, Town Attorney, and Town Manager’s Office coordinated this
report.
FISCAL IMPACT:
The fiscal impact is $78,017.33 and the first year’s payment is included in the Fiscal Year (FY)
2022/23 budget. The FY 2022/23 Operating Budget anticipated the annual fees of Microsoft
software licensing in the Town’s Information Technology Budget Operating Expenditures line.
Annual payments for years two and three have been sufficiently forecasted in the IT budget.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Microsoft Volume Licensing Agreement
2. Dell Technologies Estimated Quote