NYC gets citywide deal for Microsoft cloud apps

City will pay only for applications employees use

New York City has struck a deal with Microsoft for a single, citywide license for the company’s software under which the city, operating in a cloud computing environment, will pay only for the applications that employees use.

Under the agreement announced today, about 100,000 city employees will have access to Microsoft’s Web-based cloud computing services, which would give employees up-to-date tools, foster greater collaboration, and save the city an estimated $50 million over five years, according to an announcement from the city.

The agreement with Microsoft is part of a larger effort by New York, called SimpliCity, to streamline operations and reduce costs through technology.


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Before today’s agreement, announced by Mayor Michael Bloomberg and Microsoft CEO Steve Ballmer, New York had more than 40 separate license agreements, along with other, separate support deals. Under the licenses, the city paid for a the full Microsoft Office suite — including Word, Excel, PowerPoint, Outlook and other tools — even if many employees used only Word and Outlook.

Under the new deal the city will pay only for the applications employees use.

The cloud computing environment will give city workers applications that are automatically updated and allow them to collaborate more easily and share applications created by city programmers, the city’s announcement said.

The agreement resulted, at least in part, from the competition among Microsoft and other cloud-based services providers, such as Google and IBM, Ashley Vance writes in the New York Times. Google Apps for Government has been adopted by Los Angeles and other cities, for example, as well as some federal agencies.

“We took advantage of the competitive moment,” Stephen Goldsmith, deputy mayor for operations, told Vance.

About the Author

Kevin McCaney is editor of Defense Systems. Follow him on Twitter: @KevinMcCaney.

Reader Comments

Thu, Oct 21, 2010

Actually Erick Schonfeld at TechCrunch reported it was not competitive. "Despite the substantial savings, it turns out this wasn’t a competitive process. I’ve learned that Google and other companies were not invited to bid for the deal. Maybe New York city taxpayers could have saved even more. Update 2: The city confirms that nobody else bid because it wasn’t a new contract. Instead the city renegotiated and consolidated its existing contracts with Microsoft. Pretty weak sauce, if you ask me." Also, if you read through this, it is more about their current packaged server and client software for on premise, not cloud. It only says they will have access. See http://techcrunch.com/2010/10/20/microsoft-new-york-city/

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