Vic Govt instantly blows $4.4m on Windows 2003


news The Victorian Government has paid Microsoft a whopping $4.4 million for extended support for the now-defunct Windows Server 2003 operating system, in a move which sharply demonstrates the extreme cost of running operating systems which are no longer formally supported by their vendors.

Server 2003 was first released in 2003, and is regarded as a landmark release for Microsoft that allowed the company to continue to push back against the dominance of the Unix and Mainframe operating systems in datacentres. It was based on Microsoft’s highly successful Windows XP desktop platform and introduced a large number of improvements to web, print and file serving applications. An updated version, Server 2003 R2, was released in late 2005.

Microsoft has been providing what it calls ‘extended support’ to the platform since mid-2010 (consisting of security updates), but last week even that support expired and Microsoft will essentially abandon the platform in favour of updated versions.

This week (as first reported by iTnews), the Victorian Government published a contract notice through its tendering website which disclosed its CenITex, Department of Health and Human Services and Victoria Police agencies had paid Microsoft $4.4 million for custom support for Windows Server 2003.

This payment means the state is still running the operating system in a number of critical instances and requires ongoing security support, and perhaps other services, to help keep those platforms functional for the time being. The cost represents one year of support.

Microsoft has not publicly stated the cost per server instance for custom support for Windows 2003, but in February The Register reported figures published by a Microsoft licensing expert, Paul DeGroot of Pica Communications. DeGroot alleged the cost would be at least $600 per server for custom support after June 14 this year.

The Register reported the cost would double for each year that organisations required the custom support — meaning, if true, that the Victorian Government could be facing a bill of as much as $8.8 million at this time next year if it does not upgrade its systems over the next 12 months.

There is also ample indication that the Victorian Government will not be alone in paying Microsoft extensive fees for custom support for Windows 2003.

Research published by local analyst firm Telsyte and Dell last week suggests that one in five Australian businesses are still running Windows Server 2003. One in four were not aware of the cut-off of support from Microsoft, while one in ten did not believe there were security risks from running outdated and unsupported server technology.

There is light at the end of the tunnel, however — 70 percent of those affected intended to upgrade the software within 12 months, with 77 percent intending to upgrade to Microsoft’s latest server software, Windows Server 2012. Most also saw this as a chance to upgrade their server hardware at the same time.

Great news for Microsoft — but terrible news for the public purse and the taxpayer. One can only hope that the Victorian Government is looking to get its skates on with this one. Otherwise, it may find those Windows Server 2003 security patches eventually get very expensive indeed.


  1. Who is in charge of these departments that they let things get so bad? It’s not like these are low paying jobs

  2. $600 would be pretty reasonable to add a year to server lifespan. The cost of new hardware, new software, migration, and fixes for any in-house apps should exceed that averaged over the life of a server.

    Of course that’s assuming zero performance or productivity gains with new servers, but it’s not an indefensible decision so far.

  3. Nearly 2 decades I have run Debian, with timely updates and version upgrades every 2 or 3 years.
    I only bought CDs in the good old days when the internet was too slow.
    Why would any organisation not use Linux ?

    • There are many reasons, but mainly it is around support; both from the user and application perspectives

      In the world of IT support there are very, very few Linux shops and quite a lot of MS shops (can you say Gold Partner without wincing?). On top of that, even in-house support requires an HR headcount far beyond what most organisations are willing to pay. By the time IT support is localised (brought in house) the company is usually stuck on a MS platform, using MS only apps and services.

      Then when it comes to applications, there are paid sales people pushing proprietary vendor solutions that usually run on MS stacks (.NET/ASP/MSSQL etc.), and no one out there being paid to push FOSS, so there is a natural result similar to the way politics works; the more money behind you, the more people you can convince to vote for you.

    • In corporate land, there’s a few issues with deploying Linux across the board.

      * Cost is king – while Linux is free – (as in beer) – you can’t really deploy an entire fleet of “free” Linux, because enterprise deployments are governed under “risk vs cost”. So invariably, organisations who DO deploy Linux fleets go with RHEL so they can get genuine support from a vendor. CEOs and CIOs truly hate not having direct vendor support, so the support costs are (relatively) similar between Linux and Windows.

      * Training – nerds like us love our open source solutions, but the vast majority of the workforce have grown up using the Microsoft “suite of things” – (Word, Excel, PowerPoint, Exchange/Outlook, Sharepoint, etc) – and so if you dump all your users into something completely new, you’ve got a big hit on your training budget. Quite simply, if people come into your organisation with all the skills to use your suite of software without having to train them, then Microsoft is the default position. As a recruitment consultant I used to know once said to me: “Microsoft has the market by the nuts, deal with it…”

      * Compatibility – if all your gear is Microsoft-based, then your systems are 100% compatible with all the gear of the outside companies you deal with, who are also using Microsoft-based gear. See previous “market by the nuts” comment.

      It’s unfortunate, but in the end, market realities push people away from full Linux fleets.

    • The simple answer is that some techies like Linux.
      and other techies like Windows.

      I’m not a Microsoft shop in that I don’t sell Microsoft software for money, but I primarily develop in .net/c#, so what I make usually requires a Microsoft back end.
      sure, a Linux alternative exists, I’ve had to support, and develop on these platforms also, but if I have a choice, and the budget, I’ll go Microsoft because I personally find it a much more pleasurable experience.

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