Aged care providers are reconsidering IT investment following Microsoft’s decision to change its software licensing arrangement for charitable aged care organisations.

Under the new arrangements, aged care providers will only be able to purchase the charitable licences if they meet a set of criteria and run a facility with a maximum of 60 beds.

In a survey of providers by KM Group, 45.5 per cent of participants said they would delay existing and planned IT spending.

A further 13.4 per cent of participants in the survey said they would stall IT investment until viable alternatives were found.

KM Group estimates that the changes could lead to a price hike of up to 500 per cent for not-for-profit providers.

Nine out of ten provider organisations that took part in the survey said they would consider alternative applications to Microsoft Office, such as open source software and cloud computing.

“There are alternatives that do exist,” said the Director of KM Group, Mark Barnett. “Now it is a matter of defining those alternatives and educating the industry as to what they are.

“We need to look at different ways of doing things so we don’t end up being locked into the grip of Microsoft.”

However Mr Barnett added that many providers are confused about the alternative software arrangements.

“We need to provide the industry with a choice so that it can make up its mind and not just be tied to one supplier,” he said.

The survey also revealed alarmingly low levels of investment in information technology.

Close to two thirds of participants said they spent less than two per cent of their operating expenditure on IT, excluding telecommunications costs.

“And that figure comes off the back of an increase in expenditure last year,” said Mr Barnett. “On the bright side there is lots of room for improvement.”