Pentagon gives Dell a $9.7bn contract to consolidate Microsoft licences across the military

The US Department of Defense awarded Dell a five-year, roughly $9.7bn contract to consolidate Microsoft software licensing across the military, intelligence community, and Coast Guard. The agreement is titled the Microsoft Department of War Enterprise Software Agreement II Core Enterprise Technology Agreement. Dell Federal Systems is the prime contractor, while Microsoft provides the underlying software. Dell will resell Microsoft 365 subscriptions, advanced cloud capabilities, and on-premises licensing under a single consolidated framework. The contract replaces separately negotiated licensing arrangements that accumulated across services over the past decade. The Pentagon expects cost discipline, aiming to save about $422m annually by removing duplicative licensing spending. The contract value is reflected in Dell’s federal-systems financials, while Microsoft receives the underlying software-licensing revenue.

"The US Department of Defense has awarded Dell a five-year, roughly $9.7bn contract to consolidate Microsoft software licensing across the entire US military, the intelligence community and the Coast Guard, according to a Reuters report on Wednesday."

"Dell will resell Microsoft 365 subscriptions, advanced cloud capabilities and on-premises licensing to the relevant military and intelligence buyers under a single consolidated framework, replacing the patchwork of separately negotiated contracts that have accumulated across the services over the past decade."

"Officials say the consolidated vehicle will save roughly $422m a year by eliminating the duplicative licensing spending that had quietly ballooned across years of fragmented procurement."

"The $9.7bn is therefore not fresh spending so much as redirection of existing IT budgets from individual services and agencies into a single enterprise-wide buying arrangement."

Read at TNW | Microsoft