US Navy to Buy $700 Million of Hardware and Software from Microsoft - The UpStream

US Navy to Buy $700 Million of Hardware and Software from Microsoft

posted Saturday Jul 14, 2012 by Nicholas DiMeo

US Navy to Buy $700 Million of Hardware and Software from Microsoft

Have you ever wondered where our tax dollars end up going? Well, luckily for you I love to cover that kind of stuff. Just under three years ago, I wrote about the Air Force buying 2,200 PlayStation 3 consoles for the building of a supercomputer, bringing their total to 2,536 units. If you thought the $118,000 used to spend on Sony's gaming machine was a lot, you better prepare yourself for this news.

This week, the United States Navy has signed a three-year business deal with Microsoft that is worth $700 million. This licensing contract deals with both the Navy and the Marines and will consolidate the existing agreements into one big deal that will have Microsoft delivering desktop and server software to our men in uniform and will be the "first-ever department-wide Enterprise Software License Agreement." This follows a memo issued back in February that requires all departments in these branches to acquire their software through an enterprise deal. Apparently Cisco, EMC, HP, IBM and Oracle also had the ability to get in on a contract but Microsoft ended up winning the bid.

For more on the story, follow us beyond the break.

The Navy CIO's office said this about their future in software and hardware products,

Enterprise license agreements (ELAs) will be grounded in a strong governance framework involving the financial, acquisition, and IT management communities.

In the end, this is the Navy working on optimizing its IT department. In August, the Navy decided to begin cutting IT spending by over 25% in the next five years by shrinking data centers and other related operations. This deal should help "optimize cost savings" with Microsoft being the direct supplier for everything they need, however specific savings were not disclosed.

Tim Solms, GM of Microsoft's DOD business, said,

Microsoft has worked with the Department of the Navy to secure a first-ever department-wide Enterprise Software License Agreement, which will cover Microsoft licenses and software assurance. This new contract, which will be implemented by long-time Microsoft partner Softchoice Corporation, will serve as the single Microsoft agreement across all three Navy networks and the {Marine Corps Enterprise Network}, providing a framework to help manage upcoming transitions including {the Navy/Marine Corps Intranet and Continuity of Services Contract to NMCI/CoSC to the Next Generation Enterprise Network}. The Navy has, through policy, committed to leveraging a single vehicle for all Microsoft products and over time consolidating over 23 existing Microsoft enterprise agreements across the Navy to a single, centralized Department of Navy Enterprise License Agreement. The agreement will cover Microsoft licenses and software assurance for the Navy's 569,000 desktops.

So they're taking 23 already in-place agreements to one single entity that will then have the Navy purchasing over half a million desktop PCs from the company. I hope all of this $700 million is well spent. What do you think? Is this wasteful spending or do you think it will actually help in the long run? Tell us your thoughts in the comments section below.

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