Tags: Microsoft | Largest | US | Pact | Cloud | Computing

Microsoft Wins Largest US Pact for 'Cloud' Computing

Wednesday, 08 Dec 2010 10:19 AM

Microsoft Corp. won a contract to provide Web-based e-mail and other services to the U.S. Department of Agriculture, making headway in efforts to gain share in the growing market for cloud computing.

The federal agency will move 120,000 users to the company’s Internet-based e-mail and conferencing software, said Redmond, Washington-based Microsoft. The company said it beat out Google Inc. and International Business Machines Corp. for the deal.

Technology companies are racing to lure customers that want computing delivered over the Internet from an outside provider, via the so-called cloud. The contract, which also involves instant messaging and document-sharing programs, is the largest U.S. government adoption of cloud software, Microsoft Vice President Ron Markezich said in an interview.

The department chose Microsoft because half its workers already use Microsoft’s Exchange e-mail software, Chris Smith, chief information officer for the Agriculture Department, said in an interview. Because cloud programs are typically stored on the provider’s server, customers can save money on machines and the cost of maintaining and updating the software.

“It gets us out of the hardware business and ultimately out of the software-refresh business,” Smith said. “It gets us out the business of owning the car, changing the oil, and doing the upkeep.”

Microsoft gained 9 cents to $26.96 at 9:38 a.m. New York time in Nasdaq Stock Market trading. It had declined 12 percent this year before today.

Google’s Recent Win

Smith said the department will pay about $8 per user per mailbox and is aiming to save $6 million next year. Microsoft’s Markezich declined to comment on the value of the deal, which will be administered by Dell Inc.

Google said last week that it beat out Microsoft for a $6.7 million contract to handle e-mail for the U.S. General Services Administration. In October, New York City and the state of California opted for Microsoft’s cloud software, while Minnesota announced a similar agreement the previous month.

Global cloud-computing sales may reach $148.8 billion by the end of 2014, up from $58.6 billion last year, according to researcher Gartner Inc. in Stamford, Connecticut.

The U.S. government has been quick to move programs to the cloud model because Vivek Kundra, chief information officer for the U.S., has pushed federal, state and local governments to look at the option as a way to save money as they update and consolidate systems, Markezich said.

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Microsoft Corp. won a contract to provide Web-based e-mail and other services to the U.S. Department of Agriculture, making headway in efforts to gain share in the growing market for cloud computing. The federal agency will move 120,000 users to the company s...
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2010-19-08
 

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