In the clouds: Microsoft and the New York City

New York City, perhaps with one of the biggest customer base with over 100,000 city employees certainly catches the eye when its Mayor Bloomberg wants to make an announcement with Microsoft, CEO Steve Ballmer. At City Hall, they both have announced a new five-year deal which will turn up dozens of separate city contracts with Microsoft into one master agreement and is projected to save the city an amount of $50 million. The value of the deal itself is about $100 million, or $20 million a year.

These savings will not only come from different contracts’ consolidation, but also by shifting some of the software needs of the New York City to the Cloud. The first phase of the deal impacts 30,000 city employees, and will include Microsoft Windows 7, Office, SharePoint, Exchange, Live Meetings, Azure, Windows Server, development tools, and database products. (also, when Office 365 becomes available that too could be show up as the part of the agreement).

City workers will fall into one of three buckets: occasional users, basic users, and power users. The city employs a lot of desk-less workers who are out on the streets. Giving them access to Office, email, and collaboration tools in the cloud makes more sense than giving them desktop versions of Office. Power users, on the other hand, will require both desktop and cloud versions. The more software that Microsoft hosts on its own servers, the more the city saves on hardware and IT costs.