Microsoft signs cloud deals with California, New York City

Government IT consolidation efforts are driving the need for new cloud services

Continuing the progress that Microsoft is making in the state and local government sector, the company has signed cloud computing deals with the city of New York and the state of California.

For California, Microsoft will provide the state's 200,00 employees with e-mail services through the company's Business Productivity Online Suite. The state is consolidating its IT operations within a single agency and was looking for ways to use cloud computing to cut costs, wrote Gail Thomas-Flynn, the Microsoft U.S. state and local government vice president, in a blog post.

Integrator Computer Science Corp. is heading up the consolidation effort, which involves migrating employees off of 130 different e-mail systems, which were running across three different platforms, to either the Microsoft offering or to a state-run hosted service. About 80 percent of the state agencies were already using Microsoft Exchange for e-mail, Thomas-Flynn noted.

According to a state official familiar with the contract, the indefinite delivery/indefinite quantity (IDIQ) contract is worth up to slightly over US$50 million for CSC, depending on how many individual agencies opt for the service. When California vetted the e-mail consolidation contract last summer, Google protested the bidding procedure, claiming the state had rigged the requirements in Microsoft's favor, according to the Los Angeles Times.

With the city of New York, Microsoft has signed a deal that will consolidate the dozens of individual Microsoft license agreements the city had into a single license. The new agreement will also allow the city's 100,000 employees to access Microsoft cloud services.

"By capitalizing on the City's buying power, consolidating dozens of separate city agency license agreements into a single one, and paying for software based on use, we'll save $50 million over the next five years," New York City Mayor Michael Bloomberg said in a statement.

The license consolidation came about in part thanks to a new IT purchasing structure the city put in place, one that authorizes the city's Department of Information Technology and Telecommunications (DoITT) to coordinate all of the city's information technology planning.

Like California, DoITT is currently consolidating each agency's IT operations into a centrally managed data center. Formerly, each New York agency procured software on its own, resulting in more than 40 different licenses the city held.

Bloomberg also touted the deal, the details of which are still being worked out, as one that would get city employees up to speed with new technologies. The city's employees can use Microsoft's hosted collaboration and e-mail services. The cloud access will be rolled out in stages, with 30,000 employees getting access initially, and the remainder over time

"To deliver services efficiently and function at the highest level, city employees need the same technological resources that top private sector businesses provide to their employees," he said.

(Andreas Udo de Haes of IDG Netherlands contributed to this report.)

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