Microsoft has convinced New York City to use its newly launched cloud-based service Office 365, which will feature online versions of Microsoft Office, SharePoint and Exchange.
Speaking during a press event in New York City, Mayor Michael Bloomberg and Microsoft Chief Executive Steve Ballmer, jointly announced the contract, which will span-out for a period of 5 years.
The city will pay Microsoft $20 million for using Office 365 for the next five years, thereby saving $10 million every year.
Microsoft's recent government contract is a huge blow to search giant Google, which offers similar cloud-based office, calender and e-mail services.
Mayor Bloomberg said during the press conference: “We had more than two dozen separate license agreements and many different individual maintenance and support packages. It was complicated, cumbersome and, needless to say, not very cost effective.”
Under the new contract, Microsoft will provide Office 365 for 100,000 city workers and its Azure platform for developers to come with applications.