Feds renew govt-wide Microsoft sourcing deal for three more years

The federal government has renewed a volume sourcing arrangement covering Microsoft products for another three years, which the vendor plans to use to push Office 365 and Azure adoption.

Minister for Government Services, Stuart Robert, said the renewal meant that the government is now onto its fourth iteration of the VSA.

Both Robert and Microsoft indicated that the latest version of the VSA contained more favourable terms and pricing around cloud services adoption.

Comment was being sought from Digital Transformation Agency (DTA) and Microsoft Australia on specific terms at the time of publication.

“This arrangement provides the tools to support agencies in their transition to a modern IT environment through the adoption of cloud-based services,” Robert said.

“Across government, agencies are in the process of transitioning to cloud. 

“This enables agencies to take advantage of Microsoft’s ability to support a hybrid cloud/on-premises environment, which can help make the move to the cloud faster and more efficient.”

Microsoft Australia said in a statement of its own that the new VSA “makes Microsoft 365 available to all federal government agencies on a cost-effective basis, and opens the door to accelerated adoption of Microsoft Azure and Dynamics 365”. 

The vendor said that “less than two percent of the Commonwealth will remain on legacy on-premise desktop licenses”, presumably once this VSA expires in three years’ time.

Microsoft predicted a boon for local software companies that develop for and/or host on Azure, since its agreement would make it simpler for agencies to adopt these cloud-based tools.

Microsoft also said it would also make “more than 1400 subsidised Azure training places ... available to Australian government IT workers,” as part of the deal.

The existing VSA had allowed agencies to procure O365 and Azure services via Data#3.

Data#3 continues to manage Microsoft licensing arrangements for the federal government.

Microsoft launched two Azure public cloud regions in Canberra last year aimed at servicing the mission-critical workloads of government and critical infrastructure providers.

It was also the first hyperscale operator to be able to host protected-level workloads in either Azure or O365 - and has separate deals in place to get more of these workloads migrated.

At the same time, Microsoft is not the only cloud vendor vying for federal government attention.

Late last month, the government brokered a $39 million whole-of-government deal with Amazon Web Services to improve agency access to secure cloud services.

There are similar whole-of-government deals also running with IBM and SAP.