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Microsoft Scores Big with 3-Year Defense Department Contract

Microsoft Scores Big with 3-Year Defense Department Contract
January 9, 2013 9:42AM

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In its announcement, Microsoft said the "increasingly mobile DoD workforce" will use the latest versions of Microsoft Office and SharePoint from any location, and on "any supported device, while taking advantage of enhanced security." The software has been customized to meet the Defense Department's specific security needs.

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Microsoft has scored a big win for Windows 8 and its key Office software. The U.S. Department of Defense (DoD) has signed a three-year contract with one of Microsoft's resellers to provide the Air Force, the Army and the Defense Information Systems Agency (DISA) with the new operating system, Office 2013 and SharePoint 2013 Enterprise.

The software giant said the new agreement provides a single route for the three organizations to access Microsoft technologies in support of such IT priorities as data center consolidation, collaboration, cybersecurity, mobility, cloud computing and Big Data.

The contract was awarded to Insight Public Sector, a division of Insight Enterprises Inc., one of Microsoft's largest Large Account Resellers. Microsoft said that it will cover three-quarters of all DoD personnel, and is the most comprehensive licensing agreement the company has ever had with that agency. In addition to licensing, the agreement provides software assurance benefits and training.

$617 Million

The deal, which covers more than 2 million information technology users, is worth about $617 million. The Army expects to save over $70 million annually through the agreement and the Air Force is projecting yearly savings of $50 million. DISA said that it would see savings over 10 percent for the life of the agreement. Officials told the American Forces Press Service (AFPS) that this is the best pricing DoD has received for Microsoft desktop and server software licenses.

The agreement, DoD Deputy Chief Information Officer David L. DeVries told AFPS, is part of a "move afoot throughout the department to bring about efficiencies" in IT functions at the huge agency.

He noted that DoD is "the largest corporation out there," and added that "no one comes close to our scale, so when we talk about something that produces a standardized way of buying, installing and maintaining" enterprise software, it becomes "a huge deal."

'Enhanced Security'

In fact, the Department is touting the agreement as what it describes as a "significant pathfinder on how to do major contract awards," and represents the culmination of about a year's worth of effort among the three organizations. Army Deputy CIO Michael E. Krieger told news media that the time was needed to negotiate terms meeting "the complex technical and security requirements" of the three organizations in one agreement.

In its announcement, the company said that the "increasingly mobile DoD workforce" will use the latest versions of the productivity tools from any location, and on "any supported device, while taking advantage of enhanced security." The software has been customized to meet the Defense Department's specific security needs, and is designed to facilitate DoD's focus on mobile computing.

Tim Solms, general manager of the Microsoft Department of Defense Business, said in a statement that his company had "longstanding relationships" with the organizations, and noted that the deal allows the company to expand its support of ongoing technology modernization at the organizations.

Insight Enterprises provides hardware, software and service solutions to business and government clients around the world, and is No. 460 on the 2012 Fortune 500 list.

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