Microsoft (NASDAQ:MSFT) has agreed to a deal with the U.S. General Services Administration to provide government agencies discounted access to its cloud services and productivity software over the next three years, according to a report from CNBC.
The deal could generate $3.1B in savings for taxpayers in the first year and more than $6B during the entirety of the three-year term, the report said. Digital products covered include Microsoft Office subscriptions, Azure cloud, Dynamics 365 and Sentinel cybersecurity software. Microsoft also added one free year of its artificial intelligence assistant Copilot to government employees.
The GSA serves as the procurement and management arm of the federal government, with services ranging from managing real estate and transportation fleets to acquiring and distributing an array of supplies. It oversees $110B in annual spending on goods and services for various agencies, with the bulk tied to information technology.
Microsoft is the latest big tech company to reach a discount agreement with the GSA this year. Others include Salesforce (CRM), Adobe (ADBE), Amazon (AMZN) and Google (GOOG)(GOOGL). AI startups such as OpenAI and Anthropic have also signed up to offer discounted subscriptions.
Salesforce offers Slack Enterprise Grid at a temporary price reduction of 90% and almost 70% off per user on Slack AI for Enterprise to every federal agency. Adobe will offer a “comprehensive Paperless Government Solution” at a 70% discount off the current GSA list price. Google also temporarily cut the price of its Workspace software by 71% for every federal agency, regardless of how large the deal is. Amazon Web Services agreed to provide up to $1B in savings for cloud adoption, modernization, and training for federal agencies through the end of 2028.