"What we are keen to get across the state is the Active Directory system so area health services in NSW can talk to each other. The Vista upgrade is not something we signed up for, but what is on the list are Office and XP, as well as various server applications.

"There was no tendering process; Microsoft is already a supplier under government contracts throughout NSW Health. Microsoft saw us as a key customer and NSW Health is a big animal and we were in a good bargaining position, but this deal tidies up all our contracts."

NSW Health uses around 2500 servers, which will be standardized on Exchange. Implementation has already begun. Should the contract be extended an additional three years it will be worth A$72 million, the largest contract signed in Australia by Microsoft.