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Army enlists Microsoft for software deal

The U.S. Army announces plans to centralize its purchases of Windows, Office and other applications in a six-year deal valued at roughly $470 million.

The U.S. Army announced this week plans to centralize its Microsoft software purchases in a six-year deal valued at roughly $470 million.

The deal, which is part of an overall effort by the U.S. Department of Defense to consolidate its software purchases, covers both desktop and server software including Microsoft Office and various flavors of the Windows operating system. It also provides for upgrades over the life of the deal.

"Microsoft is already installed ubiquitously throughout the Army," Col. Mark Barnette told CNET in an interview. "In the past, it has always been ordered or funded at a lower level."

Barnette estimated that more than 90 percent of the Army's computers are running Microsoft software, but said it has been difficult to standardize on a particular version of Office or Windows, with various units saying they lacked the budget to upgrade their software.

"In the past, it was very fragmented," said Barnette, who works in the Army's chief information office.

By centralizing the purchase of Microsoft software, the Army estimates that it will save from $50 million to $100 million compared with what it likely would have spent over the same six-year period.

At the same time, the Army pact gives Microsoft a big government win at a time when the software giant is seeing increased competition--particularly overseas--from Linux. Last month, for example, the Munich, Germany, government switched 14,000 desktops to Linux from Windows. In response, Microsoft has stepped up its business efforts and is also allowing some governments to have broader access to Windows source code.

Microsoft spokesman Keith Hodson said that the Army is showing a great deal of faith in Microsoft's software strategy--particularly its security efforts--by signing a long-term agreement.

"It really validates their belief in Microsoft's role in the enterprise," said Hodson. "What we heard repeatedly from Army officials is they like the direction we are headed with our security model. They were particularly enamored with security features within Active Directory."

The Army's arrangement calls for enterprise license of the most commonly used software and locks in a negotiated price for other software that is purchased on a one-off basis.

"It's a more holistic approach," Barnette said.