Dell $DELL Federal Systems, a unit of Dell Technologies, won a five-year, $9.7 billion contract from the Pentagon on Wednesday to consolidate Microsoft $MSFT software licenses across the U.S. military.
Formally designated the Microsoft Department of War Enterprise Software Agreement II Core Enterprise Technology Agreement, the deal encompasses Microsoft 365, advanced cloud subscriptions, and on-premises licensing capability. It extends access to all Defense Department organizations, the intelligence community, and the U.S. Coast Guard, according to Breaking Defense.
Rather than introducing new funding, the deal pools technology budgets that were previously scattered across individual services and agencies, placing them under a Navy-managed vehicle accessible to the full range of Defense Department organizations. Annual savings of approximately $422 million are anticipated under the arrangement, a figure Davies said should climb as the department completes the broader consolidation of its IT services.
"This second-generation blanket purchase agreement will streamline and consolidate critical Microsoft software and services across the Department of War, the intelligence community and the U.S. Coast Guard," Kirsten Davies said at a Wednesday briefing at the Pentagon.