Microsoft’s $6B Savings Package for U.S. Federal Agencies

Microsoft is enhancing its federal presence with significant discounts under OneGov. This procurement strategy encourages agencies to purchase through a single channel, consolidating IT spending. By pooling demand, the government gains leverage to negotiate larger discounts.

Microsoft projects potential savings of $3.1 billion for agencies in the first year alone, with total savings potentially exceeding $6 billion over three years. This new agreement aims to strengthen security, improve citizen services, and save over $3 billion in taxpayer money in the first year alone.

These discounts are valid until September 2026, requiring agencies to purchase through the GSA under OneGov to qualify. Not every office is eligible for the lower rates. With federal IT spending at around $80 billion annually, reducing costs represents a significant reduction.

Microsoft 365 is a key service included in the deal, offering discounts on Word, Excel, PowerPoint, Outlook, and Teams. Azure's cloud infrastructure is also covered, with waived data egress fees. Dynamics 365 business applications and the Sentinel cybersecurity platform are also part of the discounts.

Microsoft CEO Satya Nadella personally engaged in this agreement, speaking with Josh Gruenbaum, head of the GSA's Federal Acquisition Service. This highlights Microsoft's strategic move to deepen its role in government technology and expand AI tool usage.