Microsoft joins the ranks of U.S. government price reductions: offering $6 billion in discounts over the next three years
Microsoft has reached an agreement with the U.S. General Services Administration to provide $6 billion in discounts to the government over the next three years, saving taxpayers $3.1 billion in the first year. The covered products include Microsoft Office software, Azure cloud services, and more. The Microsoft CEO stated that this move will help federal agencies leverage artificial intelligence to improve public services. Other tech companies such as Salesforce, Adobe, Amazon, and Google have also signed similar agreements
According to Zhitong Finance APP, Microsoft (MSFT.US) has reached an agreement with the U.S. General Services Administration to provide discounted access to its cloud services and office software for government agencies over the next three years. The U.S. General Services Administration stated that the agreement will save taxpayers $3.1 billion in the first year and over $6 billion throughout the three-year contract period. The covered digital products include Microsoft Office subscription services, Azure cloud services, Dynamics 365, and Sentinel security software. Microsoft is also providing government employees with one year of free access to its AI assistant, Copilot.
Microsoft CEO Satya Nadella stated, "For over forty years, Microsoft has worked with the U.S. government to serve the American people. Through the new agreement with the U.S. General Services Administration, including the provision of free Microsoft 365 Copilot services, we will help federal agencies leverage AI and digital technology to improve public services, enhance security, and save taxpayers over $3 billion in just the first year."
The U.S. General Services Administration is the federal government's procurement and management agency, covering services from managing real estate and transportation fleets to procuring and distributing various supplies. The agency is responsible for managing $110 billion in goods and services expenditures for various agencies each year, most of which is allocated to the information technology sector.
Microsoft is the latest large tech company to reach a discount agreement with the U.S. General Services Administration this year. Other companies include Salesforce (CRM.US), Adobe (ADBE.US), Amazon (AMZN.US), and Google (GOOGL.US). AI startups such as OpenAI and Anthropic have also signed agreements to provide discounted subscription services.
Salesforce has offered a temporary discounted price for Slack Enterprise Grid to federal agencies, with discounts of up to 90%, and nearly 70% off the price of Slack AI for Enterprise per user. Adobe will provide a "comprehensive paperless government solution" with a discount of 70% off the current U.S. General Services Administration pricing. Google has temporarily reduced the price of Workspace software for each federal agency by 71%, regardless of the size of the transaction. Amazon Web Services (AWS) has agreed to provide federal agencies with savings of up to $1 billion for cloud service adoption, modernization, and training by the end of 2028
