Government signs ‘profound’ cloud deal with Microsoft

The government has signed a three-year agreement with Microsoft to “streamline cloud access” for 98 federal agencies.

The whole-of-government volume sourcing agreement was negotiated through the Digital Transformation Agency, and will make Microsoft 365 more cost effective for adopters, Microsoft said.

The agreement renewal also creates a pathway for “accelerated adoption” ofMicrosoft AzureandDynamics 365.

More than 1,400 subsidised Azure training places will be made available to Australian Government IT workers, plus funding to support 100 new trainees in the Australian Capital Territory over the next two years.

It is the fourth iteration of the agreement, which starts this month and will expire in 2022.

“This arrangement provides the tools to support agencies in their transition to a modern IT environment through the adoption of cloud-based services,” saidMinister for Government Services, Stuart Robert in a statement this morning.

Microsoft said that as a result of the agreement, fewer than two per cent of the Commonwealth will remain on legacy on-premise desktop licenses.

The Microsoft deal follows a similar volume sourcing agreement between government and Amazon Web Services, which was signed last month.

A string of similar agreements have been made with other tech vendors. In mid-2018 a whole-of-government purchasing deal was made withIBM worth an estimated $1 billion over its five-year lifespan. Canberra also has agreements with SAP and Concur.

The agreements mean agencies can achieve cost reductions through efficiencies of scale, rather than having separately agreed contracts.

It is mandatory for agencies to purchase ‘Common Cloud Enrolment’ products and services through the Digital Transformation Agency. Other products and services, such as server licensing, desktop applications and Azure offerings, need to be purchased through Data#3.

Data#3 is the sole provider for government agencies under the agreement.

Microsoft said the deal “opens up significant opportunities for Microsoft’s partner community” and that its impact would be “profound”.

Microsoft has been busy repairing its relationship with partners after it announced plans to stop providing partners with internal use rights on products. The proposal was met with global uproar from the channel ecosystem, and rescinded earlier this week.

“We are proud to have been a strategic partner of the Australian Government for many years, and I deeply appreciate the continued trust that this latest agreement signals,” said Steven Worrall, managing director Microsoft Australia.

“It is my strongly held opinion that for Australia to sustain its many years of economic success we need to work together to digitally transform the public and private sectors, injecting efficiencies, infusing intelligence, and ensuring inclusion,” he added.