Microsoft Corporation (MSFT) Secures $600M DoD Contract

Just days after it secured a significant enterprise contract with the City of Chicago, Microsoft Corporation (NASDAQ:MSFT) is continuing to re-establish its supremacy in enterprise networks and taking it into cloud computing. Facing some intensified competition from Google Inc. (NASDAQ:GOOG) – and perhaps, to another degree, Amazon.com Inc. (NASDAQ:AMZN) Web Services –  it appears that the pioneer and king of enterprise technology is moving further to keep its title.

Microsoft Corporation (NASDAQ:MSFT) announced this week that it has secured a three-year, $617 million contract with three agencies within the U.S. Department of Defense to provide more efficient enterprise computing and streamline services and communications. The contract involves the Defense Information Systems Agency, the Air Force and the Army and would include licensing to allow access to Office 2013, SharePoint 2013 Enterprise and to the new Windows 8 operating system.

It is reported to be the most sweeping licensing agreement ever developed with the Defense Department and would encompass about three-fourths of the department’s personnel. The DoD estimates that will save $100 million each year over the length of the contract with the streamlining of licensing, installation and maintenance of the network.

“Microsoft was the only product for enterprises for awhile, so by default, they are going to be the leader in the industry,” said Trip Chowdhry of Global Equities Research. “This just shows that for enterprises looking for serious office productivity, no product can compare, especially because large corporations or government agencies are so fully invested in the product.”

“The green field opportunities are going to competitors,” Chowdhry noted. “But Microsoft is not going to disappear. They will always be a player. [CEO Steve] Ballmer is trying to move a very big, heavy ship in the right direction. They’re slow and they’re less innovative than their competitors, but many enterprises are heavily invested in the Windows ecosystem, and you can’t switch out from that overnight.”

How do you see this deal for Microsoft Corporation (NASDAQ:MSFT), and how do you see the company’s enterprise efforts? Can Microsoft remain the top choice for enterprises, and does this keep Microsoft viable in the tech world? Let us know in the comments section below.

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