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US Army Signs $471,000,000 Deal for Microsoft Software

zero_offset writes "According to this article at Yahoo, Microsoft will provide software for 494,000 Army computers during the next six years. At roughly $950 per computer this clearly involves more than just the OS, although the article unfortunately doesn't provide details, and I was unable to find any references to this on the Microsoft website." The great things about this deal: the Army is going through a reseller, when clearly they have the purchasing power to buy direct; and most of the computers they purchase are normal consumer machines which will be purchased with Windows and Office already installed, so the Army will be paying twice for each machine.

17 of 1,260 comments (clear)

  1. Paying twice? by CrayzyJ · · Score: 5, Informative

    "so the Army will be paying twice for each machine"

    I RTFA and I saw NO reference to anyone paying twice. The article does not state this deal is for the OS and office, so you, Michael, should not assume anyone is paying twice.

    I know, I know. NO, I am not new here. Yes, I know /. is slanted. It still irritates me though.

    --
    Holy s-, it's Jesus!
    1. Re:Paying twice? by matthew.thompson · · Score: 3, Informative

      Actually the standard licensing systems for Microsoft Office and Windows (Microsoft has a special name for this type of license but I can't remember it exactly - probably desktop platform) are about the only things they will license on that many machines.

      And the Microsoft subscription license requires you to purchase computers with Windows and Office AND subscribe to Windows and Office for that machine.

      If you end the subscription license you not only loose the upgrade options etc but you also forfeit the use of the original OEM license!

      For this reason we only purchase OEM copies of Windows and just leave them on the box it came with.

      --
      Matt Thompson - Actuality - Insert product here.
  2. What software? by Surak · · Score: 4, Informative

    From the article:

    Charles Di Bona, software analyst at Sanford C. Bernstein, said in a research report that the contract would most likely add $16.6 million per quarter of "high-margin (in the range of 89 percent) revenues and add $0.001 per quarter to EPS."

    What products make M$ *that* much profit? Windows and Office of course.

    Let's see...if the Army is paying full retail (which I wouldn't doubt):


    Microsoft Windows XP Professional: $299
    Microsoft Office XP Professional: $449
    Microsoft Visio Standard: $199

    Total: $947


    There's most likely your answer.

    (Also, I happen to know that Visio Standard comes on the Army's standard build (a friend of mine worked for TACOM), so that's why picked it :)

    1. Re:What software? by HBI · · Score: 3, Informative

      Sorry if I made you feel bad. People usually rag on the Army here so...

      US Army did not (previously) have a site license for the entire organization. There may have been localized (for instance, the Pentagon) site licenses, but not for everywhere. This apparently gives the Army that. Previously, the Army was buying 2k Server/Adv Server/SQL/etc licenses individually + CALs which was expensive as hell and had no benefit for the bulk purchasing power of the Army.

      This deal gives them that.

      Admittedly the previous way of buying things was fairly stupid. This way is about the best that can be hoped for - the military isn't allowed to single-source anything which is probably why it went through a third party retailer who could handle the GSA contract details.

      --
      HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
  3. The Seattle PI has a little more by Poilobo · · Score: 4, Informative

    The deal $970 per seat includes OS, Exchange, SQL, and Office so that's about right.

    The article also says the US military seems to think Microsofts security problems were not significant enough to stop the deal.

    http://seattlepi.nwsource.com/business/128059_msft military25.html

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    Sig (appended to the end of comments you post, 120 chars)
  4. Welcome to the world of government contract$. by Wakko+Warner · · Score: 5, Informative

    My friend did some contract work for the Army a few months back. They needed a pair of IBM RS/6000 P-series 660s, fully loaded, attached to a pair of FastT700 fibrechannel arrays. Close to $1M worth of hardware, by my rough estimates, having purchased similar hardware in the past.

    This was for a workgroup of 30 people.

    Government contracts are the best.

    - A.P.

    --
    "Remember when the U.S. had a drug problem, and then we declared a War On Drugs, and now you can't buy drugs anymore?"
  5. Microsoft hardly creates jobs by 73939133 · · Score: 4, Informative

    If you are concerned with job creation, Microsoft is the wrong company to give money to. First of all, Microsoft needs much fewer employees than other industries to generate each $1m in revenue. In addition, since these are probably sales of existing software, there will be almost no job creation from those sales at all. Furthermore, Microsoft has a lot of its jobs overseas, so much of Microsoft's already measly job creation doesn't even take place in the US.

  6. Re:This doesn't strike me as unreasonable. by kk5wa · · Score: 5, Informative

    AFAIK, WinXP has not been approved for use on any DoD network. There are a few stand-alone systems out there, but XP on a network is a big no-no.

    --
    sine puella vita suget
  7. Re:494000 computers - One per soldier. by stevesliva · · Score: 3, Informative

    About one computer per soldier, since total personnel in 4/2002 was 481,266. Given the typical astronomical support to combat troop ratio, that's not huge at all.

    --
    Who do you get to be an expert to tell you something's not obvious? The least insightful person you can find? -J Roberts
  8. Re:not a big suprise by jratcliffe · · Score: 5, Informative

    Lay off the toilet seats. They weren't that expensive, it's an overhead (read cost accounting) issue. Imagine a project, Weapon X, with $1BN in R&D expense required to design the weapon, but where actually producing the full run of Weapon X only costs $100MM (not an unusual situation in military procurement). Then imagine that, as part of that $100MM, there's a wrench needed to tighten the bolts on Weapon X. Since only 10 of these wrenches will ever be produced (they're oddly shaped to fit into the chassis of Weapon X, and the bolt is a strange size), so the cost of the mold and casting is $500 - it's a $50 wrench - pricy, but not ridiculous. For the project as a whole, though, remember you have to allocate that $1BN in R&D cost. From a cost accounting point of view, every dollar spent on the wrench gets $10 in R&D allocation. Voila, a $550 wrench.

  9. Re:This doesn't strike me as unreasonable. by faust2097 · · Score: 4, Informative
    The armed forces can afford to code up something? Can't afford? Are you joking?
    The armed forces [especially the Army] are very hard up for geeks right now, I've been talking to a couple recruiters over the last few weeks and they've all been extremely excited to speak with someone who has a college degree and good computer skills.

    Given that they don't have enough people to fill the existing technical positions that they have open, how could they possibly expect to take on something like an OS switch without spending a lot more than half a billion dollars? They'd have to hire an outside contractor to help implement it. At least by buying Office they can havfe their existing techs support it.

  10. Re:This doesn't strike me as unreasonable. by FeloniousPunk · · Score: 4, Informative

    Furthermore, when you use these systems to deploy nukes and other highly damaging weapons, do you want a stable system or do you rely on windows?
    Man, the ignorance of /. never ceases to amaze me. Now hear this: the US military DOES NOT USE MS WINDOWS BOXEN TO CONTROL NUCLEAR WEAPONS. Or, any sort of weapon for that matter. The military, like most large institutions, has a need for office automation apps, e-mail, and the like. And for this, they use Windows and Office. Warfighting software on warfighting networks is proprietary and doesn't run on Wintel machines.
    Trust me, Mr. Random Slashdot Microsoft Basher, the military is smarter than you when it comes to figuring out its software needs and how to use computers in warfighting. Please adjust your facile and wrongheaded criticisms accordingly.

    --
    I know this because Tyler knows this.
  11. A soldier's perspective by Gregoyle · · Score: 5, Informative

    Before you get on the Army for not buying Linux or doing something Free, consider this.

    In my unit (B Co. 1/509th Abn.) we have I think 7 systems. They all run Windows 2000 and are connected to a network, through which we can access printers, other systems, and the Internet. You would be *amazed* at how many people come in a day with problems printing, getting the Internet to work, or just getting a certain program to run. You want infantrymen who at least have some familiarty with office and windows to try learning bash or mutt? It's all we can do to get all the systems functioning properly, with everyone remembering their passwords and able to get there damned email and print. If the Army mandated Linux, there would be a 4 week training program, after which chaos would ensue because 90% of the people still didn't understand it.

    Your talking about people who have trouble checking email. Asking infantrymen to run linux as part of their work would be ludicrous at this point.

    --

    "He's more machine now than man, twisted and evil."

  12. Re:Yeah Buddy! by FateCreatr · · Score: 5, Informative

    i feel i need to clear a few things up for those of you who aren't in the resale industry. first off, the article says nothing about them buying the systems from Softmart. second, since this is a 6 year agreement and it says that Softmart get's a commision, this is not a resale it's an Enterprise Agreement. that kind of contract is handled direct only and Microsoft controls the pricing, but in order to make things fair for LARs (large account resellers) the deal has to be sponcered by a LAR. that reseller get's a kickback commision (like 2%), not a sale. in an Enterprise Agreement, they are agreeing to an accross the board standard to your desktops. if that $900 figure is correct then they got a great deal because that will cover the OS, Office, and all the core CALs for 6 years, including automatic upgrade rights for anything new that comes out (which given the upgrade cycle should be about 4 new versions of each). any normal company would have to pay about 5 times more for this. just try and name a company with a large install base that wouldn't jump at 4 OS's, 4 Office's and 4 of each CAL for $900. this news shows us two things in reality. one is that there is a helluva lot of markup in this product. and second is that the miltary made a good move (or MS a bad one) because they would have bought all this anyway, but at a much higher price over time. by the way, an Enterprise Agreement is not an upfront sale but a yearly payment with true-ups.

    FateCreatr, Out.

  13. Re:You are shitting me, right? by HBI · · Score: 4, Informative

    Twitter:

    Your open source advocacy is beyond reproach, but the reality of things is that the Army doesn't always get the best and brightest. MS' products _are_ easier to administer, which is why OSS has not made much of a dent in the desktop or file and print areas inside the Army. I know of several OSS advocates in my own organization: they are great, talented people, but if we try to hand Linux to some of the less skilled folks, we have an issue. OSS gets used in specific locations for specific tasks under close supervision. We get paid to make sure stuff runs, and meets user expectations. MS products do that, despite their negative facets, such as security vulnerability.

    Take that as answer to your first two pronouncements.

    In regards to contract secrecy, i'm sure if you dug hard enough you could find out what the details are. They just aren't being publicized.

    I like OSS. Linux, the BSDs, Apache, MySQL, the list goes on of fine packages I have used and will continue to use. Despite that, however, my job entails providing IT support for a busy organization. There is no time for advocacy for me. I have to do the job in the best way possible, taking into account manpower limitations, budget, and user expectation. When OSS fits, and does the job better, we use it. It doesn't always, though.

    Incidentally we have RH and Solaris running for various tasks.

    --
    HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
  14. Re:Cost analysis by gabriel · · Score: 3, Informative

    That's an old story. The problem with pencils is that they're made of graphite, which is a wonderful conductor of electricity, among other problems.

    See http://www.snopes.com/business/genius/spacepen.htm
    for the full story

  15. Re:From a soldier's point of view. by praedor · · Score: 3, Informative

    Basically, any "word processor" that would generate/use those fielded pdfs (I don't recall what they're called: pdfs with specific editable entry fields, not the whole doc) would work as a replacement for formflow.


    I have been in the AF for 14 years, all told. I recall when the Z80s were all fancy-pants. The main thing that ALL/ANY military member uses their computers for is web browsing (mozilla or konqueror, etc, would suffice), word processing (OpenOffice/StarOffice would suffice - there is nothing in word that is used to any extent to make it necessary), and email using that gawd-awful Outlook. Few use the calender crap. Most use sissy fonts and that's it. If you need to use sissy fonts and non-ascii email, then kmail and virtually any other decent GUI type email app in linux is more than enough. NEED the calender crap? There are linux solutions to that too. Finally, there is powerpoint. Big deal. OO/SO does the same thing just fine. There is NOTHING that M$ brings to the PC that the military needs. Not a single app that is provided is critical only in as much as it comes from M$ or with windoze. Given that, linux would be fine (and they would have fewer worries about worms and virtually no worries wrt viruses...unlike now with doze).


    I speak as one who has been only on the user side and on the network admin side. I have run a Comm Sqd involved in laying the cable (fiber and ethernet) and admining the crappy OS. NO user is allowed to do squat to their computer. No installs without approval, no changes, etc. EVERYONE needs passwords for logging in as a user and for unlocking their screensaver (required). See anything in THAT that isn't linux? Anything there that makes M$ Doze THE answer? Didn't think so. Don't get me started on the gawd-damned mailservers (exchange!). What a crappy way to run email. One postfix install could handle as many email addresses as needed...and you could always expand to more linux mailservers if you wanted for some operational reason. Not so with exchange. You hit it's hard limit on the number of email accounts it can handle (software limited) and you have to buy/install another server. What a racket.

    --
    In Bushworld, they struggle to keep church and state separate in Iraq as they increasingly merge the two in America.