Microsoft, GSA Agreement to Save Taxpayers $31 Billion Annually

Microsoft has entered into an agreement with the U.S. General Services Administration (GSA) to provide discounted access to its cloud services and office software for government agencies over the next three years. The GSA estimates that this agreement will save taxpayers $31 billion in the first year alone, with a total savings of over $60 billion throughout the three-year contract period. The digital products covered under this agreement include Microsoft Office subscription services, Azure cloud services, Dynamics 365, and Sentinel security software. Additionally, Microsoft is offering a free one-year subscription to its AI assistant, Copilot, for government employees.

Microsoft's CEO, Satya Nadella, emphasized the company's long-standing partnership with the U.S. government, stating, "For over four decades, Microsoft has collaborated with the U.S. government to serve the American people. Through our new agreement with the GSA, including the provision of free Microsoft 365 Copilot services, we will help federal agencies leverage AI and digital technologies to enhance public services, strengthen security, and save taxpayers over $30 billion in the first year alone."

The GSA is the federal government's procurement and management agency, overseeing a wide range of services from managing real estate and vehicle fleets to procuring and distributing various goods. Annually, the GSA manages $110 billion in goods and services expenditures for various agencies, with a significant portion allocated to information technology.

Microsoft is the latest major tech company to secure a discount agreement with the GSA this year. Other companies that have reached similar agreements include Salesforce, Adobe, Amazon, and Google. Additionally, AI startups like OpenAI and Anthropic have also signed contracts to provide discounted subscription services.

Salesforce has offered temporary discounted pricing for Slack Enterprise Grid to various federal agencies, with discounts reaching up to 90%. The price for Slack AI for Enterprise per user has also been reduced by nearly 70%. Adobe is providing a "comprehensive paperless government solution" with a 70% discount off the current GSA pricing. Google has temporarily reduced the price of its Workspace software for each federal agency by 71%, regardless of transaction size. Amazon Web Services (AWS) has agreed to provide up to $10 billion in savings for federal agencies by the end of 2028, to be used for cloud service adoption, modernization, and training.