Federal government renews, revamps Microsoft procurement deal

Fourth iteration of volume sourcing arrangement covers Azure, Windows Server, desktop applications

The federal government has renewed its whole of government volume sourcing arrangement (VSA) with Microsoft.

The VSA is now in its fourth iteration, with the new agreement taking effect at the start of July and set to expire on 30 June 2022.

The VSA “will continue to enable government agencies to enjoy better value and more flexibility when sourcing commonly used Microsoft products and services,” said government services minister Stuart Robert. 

“This arrangement provides the tools to support agencies in their transition to a modern IT environment through the adoption of cloud-based services.”

The VSA groups Microsoft products and services into four categories (known as ‘enrolments’): Common Cloud Enrolment (CCC), Agency Enterprise Enrolment, Server Cloud Enrolment, and Select-Plus.

The CCC Enrolment includes Microsoft Office, Windows and client access licences. The other categories cover server licensing, some desktop applications, online services, and a number of other Microsoft offerings including Azure, CRM Online, and Intune.

Agencies are required to purchase CCC products and services from the Digital Transformation Agency; non-CCC products are purchased via Data#3 which is the sole provider for government agencies under the VSA.

Microsoft said the new VSA will make Microsoft 365 available to federal agencies on a cost-effective basis and “opens the door to accelerated adoption of Microsoft Azure and Dynamics 365,” with less than 2 per cent of the Commonwealth to remain on legacy on-premises licences.

Microsoft said it would work with the government on training public servants, with the vendor planning to make more than 1400 subsidised Azure training places available to Australian government IT workers.

“We are proud to have been a strategic partner of the Australian Government for many years, and I deeply appreciate the continued trust that this latest agreement signals,” said Microsoft Australia managing director Steven Worrall.

“It is my strongly held opinion that for Australia to sustain its many years of economic success we need to work together to digitally transform the public and private sectors, injecting efficiencies, infusing intelligence, and ensuring inclusion.”

Microsoft last year launched new Azure data centres in Canberra with an eye to growing government use of cloud services. The company’s Australia Central and Australia Central 2 regions have been certified for handling some types of classified government data.

Using the VSA is mandatory for non-corporate Commonwealth entities, such as government departments, and optional for corporate Commonwealth entities. It is not available to government business enterprises (such as Australia Post and NBN Co).

In June the government announced a new VSA with Amazon Web Services that it said will help slash the public sector’s cloud bill.

Last year the Commonwealth signed a signed a similar deal with IBM that is worth an estimated $1 billion over its five-year lifespan.

The government also has a VSA covering SAP and Concur.

Other whole-of-government ICT procurement arrangements include the DTA-overseen mobile, telecommunications services, hardware, data centre, and cloud services panels.

The DTA is shifting to the new Services Australia department overseen by Robert. The successor to the Department of Human Services is being tasked with managing whole of government service delivery policy, whole of government information and communications technology, and ICT procurement policy and services.

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Tags governmentMicrosoftICT procurementStuart RobertDigital Transformation Agency (DTA)

More about AmazonAmazon Web ServicesAustraliaAustralia PostData#3Department of Human ServicesEnterpriseIBMMicrosoftMicrosoft AzureNBN CoSAPVSA

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