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.

Paying twice?

[CrayzyJ]

"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.

What software?

[Surak]

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 :)

The Seattle PI has a little more

[Poilobo]

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

Welcome to the world of government contract$.

[Wakko Warner]

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.

Re:Keeps the money local, I suppose.

[Anonymous Coward]

no no no no no no. A cash cow is a mature product that you "milk", selling it for a nice flow of profits while spending a minimum amount on R&D to improve it. Windows, Office, and Microsoft's other monopoly products are cash cows. So the government is supporting Microsoft's cash cows, not it's own. And the Bush administration is supporting one of it's campaign contributors.

What are the government's cash cows.? We taxpayers. Mooooo! Like it?

Microsoft hardly creates jobs

[73939133]

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.

Re:This doesn't strike me as unreasonable.

[kk5wa]

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.

Re:Keeps the money local, I suppose.

[Rapsey]

Well actualy corporate america is by no means US's cash cow. Do you know why? because they dont pay taxes. Thats right you read it right. The biggest american coorporations dont pay taxes. Thats what an army of lawyers can achieve. It isnt hard to guess who pays the taxes for them...

Re:494000 computers - One per soldier.

[stevesliva]

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

Re:not a big suprise

[jratcliffe]

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.

Re:This doesn't strike me as unreasonable.

[faust2097]

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.

Contracted out anyway

[Anonymous Coward]

They are just going to contract out people to work on their computers anyway, so it's not like the actual troops are going to be doing much work on them.

I am contracted out to the Air Force to convert one of their COBOL systems to Java. Sure, they allocate blue-suits to program, but the contractors are doing all the work. The airmen mostly sit and read online comics all day and talk about their fast-and-furious cars.

And they pay my company a pretty penny for me to write their software. Around $115/hour to be more precise. It only takes about 25% of that to cover my salary. There's where your tax $$ are going.

And there's a good chance this project won't even deploy. Stupid.

Re:Paying twice?

[MikeLaw]

According to various other articles on this subject (ZDNet, for instance [com.com]), the deal includes both desktop and server software and unlimited upgrade privileges over the life of the deal. In addition, the Army believes that the deal will save from $50 - $100 million over what they were paying piecemeal.

Re:This doesn't strike me as unreasonable.

[FeloniousPunk]

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.

Re:Paying twice?

[matthew.thompson]

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.

Re:Cost analysis

[sammy baby]

It doesn't strike me as surprising that some random guy on Slashdot would post that smoking "wouldn't be allowed on a submarine," despite the fact that this study in 1996 [sma.org] was intended to estimate the effects of secondhand smoke on submarine crews, and this Navy News update from 1993 [navy.mil] notes that sub captains were tasked with designating smoking areas for their crews while on board.

Depressing, but not surprising.

Public Information

[Ween]

Any person can request a FOIA (Freedom of Information Act) on this bid. You can see what companies bid, how much each bid, as well as all the proposal documentation. Its all in public domain. Now the trick is to find the contract number or the contracting officer so that you can contact the proper person.

Re:Cost analysis

[ldspartan]

You beat me to it :).

According to my extensive reading of Tom Clancy non-fiction (no, really... I'm too poor to buy the Jane's reference manuals), submarine ventilation / air purification systems are specifically designed to handle cigarrette smoke. Remember that most sub designs predate concerns about secondhand smoke and so forth.

Also, see this instruction from the Secretary of the Navy [daps.mil] dated August 2002.

I quote:

"On Submarines. Smoking spaces shall be designated aboard submarines following the guidance of reference (e). These spaces must be well ventilated, not in the vicinity of stationary watch stations. Berthing spaces, messes, lounges, and exercise areas shall not be designated as smoking areas. The number of smokers authorized to use a smoking area at one time shall be limited by the clearance capacity of the ventilation system."

Hurrah for /.'s readership.

A soldier's perspective

[Gregoyle]

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.

Here you go !

[Anonymous Coward]

Softmart [opensecrets.org]

Re:Yeah Buddy!

[FateCreatr]

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.

This is the Army's version of NMCI

[Lerxst Pratt]

The Army will be rolling out these computers just like N. [nmci-isf.com] M. [navy.mil] C. [usmc.mil] I. [navy.mil]. The OS of choice will undoubtedly be Windows 2000 SP1 just as it is in N.M.C.I. Also, Office Pro 2000 SR-1a is standard on all machines amongst a host of other apps. Visio is a part of the standard suite of apps. The contract is being fulfilled by EDS [eds.com]. The $950.00 price tag is not across the board. That is just the baseline. Premiums will be paid for faster machines, laptops, and Science & Technology seats.

The transition has been rough so far as users have found that they cannot abandon their legacy seats in every case. Thus, you see a lot of dual-desktop situations. I hope the Army takes into account the lessons learned from the Navy and Marine Corps' efforts.

Re:$471,000,000?!?

[bubkus_jones]

He's making a comment about how the military inflates the cost of various items so they can funnel the extra money to not-publicly-approved projects.

Have you never watched the scene in Independence Day when they're at Area51, and the old Jewish dude makes a comment about "What, you think they actually spend $20 000 for a hammer, and $30 000 for a toilet seat?"

Re:How quickly we all forget...

[sheldon]

LOL! I can't believe Linux zealots still have this in their favorites list.

"The source of the problem on the Yorktown was that bad data was fed into an application running on one of the 16 computers on the LAN."

The issue was quite clearly with a custom application written by the vendor.

The only people claiming this was the fault of NT are the clueless Unix wannabes who were upset that they lost a contract. I can't believe anybody is still fucking stupid enough to believe these claims when they've long since been discredited.

Re:Yeah Buddy!

[Anonymous Coward]

true dat. also, speaking from my military expeirience, going with linux is a scary proposition for those in power. What if red hat/suse/whoever goes out of business, where do we get support? for that matter, how many linux distributors really have a support infrastructure capable of supporting an entity the size of the army? how do we get it to interoperate with the windows that all the other services are using? Again, from experience, as far as the military is concered, the most important thing for any IT product is the support provided.

Re:Anyone here use Win for anything other than gam

[pboulang]

There are term serv / remote desktop clients available outside of the windows platform.

How about this one [rdesktop.org]?

You could also use VNC or similar.

Re:Cost analysis

[Rai]

Reminds me of a story I once heard (don't know if it's true or not.)

During the early NASA days, they had a hard time developing a pen that would write in zero gravity, but after spending a rather large sum of money, they made one.

When faced with the same delema, the Soviet space program used a pencil.

Re:Yeah Buddy!

[Marc2k]

Just curious here (because I honestly don't know), does 'over the next six years' actually mean the Army gets ALL software and revisions that come out for the products they're purchasing over the time period of the next six years? That doesn't seem to make sense. When I hear large corporations talk about anything relating to money 'over the next xx months/years/etc.', it usually means (as applied to this case) that they'll be buying $471,000,000 worth of Microsoft products spread over the next 6 years, i.e. buying 5,000 units of Win2k3 Server in 2003, 12,000 units of Longhorn and Office by 2005, etc.

The rest of your ideas are completely logical to me, but the infinite upgrades over 6 years thing sounds kind of fishy to me.

Re:Welcome to the world of government contract$.

[Pfhreakaz0id]

we've got about $2 million worth of Sun hardware about 15 feet from me at the gov agency I'm contracting at. This is for running databases and web apps for a user base of a few hundred users.

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Re:You are shitting me, right?

[Anonymous Coward]

In case you don't know, the military does give Sun quite a bit of money. Not directly, but through the various contracts for the MI systems they have. A good portion of these systems run on Sun hardware/software.

Re:Cost analysis

[gabriel]

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 [snopes.com]
for the full story

Re:Cost analysis

[One Louder]

Pretty story. Not true. [snopes.com]

Re:Paying twice? -MAYBE

[IDIIAMOTS]

Dell is perfectly happy to ship a business OS-less PC's if the business tells them they have a volume license deal with Microsoft. Just because the website makes you buy OS/Software for one PC doesn't mean a volume order for 1000's of PCs would work the same.

Re:From a soldier's point of view.

[praedor]

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.

Re:Bull mared

[afidel]

You can't run production boxes on MSDN liscenses. Read the liscense some time and figure out what you get, basically the ability to run the software in a lab environment and access to the detailed information and a certain number of help requests per anum.

Re:Yeah Buddy!

[Anonymous Coward]

I'm another software developer for the Army

We used Solaris for years with Ultras for heavys and tadpoles for lights.Guess what, they are being phased out do to complications of getting a grunt straight out of bootcamp using them.

I thought the grunt straight out of bootcamp is trained to do things the Army way whether he likes it or not. The Army pays big bucks for getting some of the most effictive warfighting software on the face of the earth. Private Ryan will do whatever he's ordered to do.

Having worked with Privates and Specialists in training exercising, I know the biggest reason they like windows is that they can play games in their spare time. Solitaire, hearts, pinball, yay.

Sun Workstations are *NOT* being phased out to my knowledge -- some contracts are moving from Sun to windows only because they can't get their software to work under Solaris. (Ironically, they think they can do better under windows).

Yeah, go, go go! Go right ahead.

[Qbertino]

Meanwhile I'll watch the day draw nearer where the german military finally switches to SuSE/United Linux or BSD due to unanswered questions wether M$ OSes have secret US-"No such Agency" backdoors built in or not.

Allthough keeping in mind that germany has been blowing 500 Million Euro since the eighties on building a new military IT strukture that still may take a while....

Army Fraud, Waste, and Abuse Hotline

[pmsyyz]

Department of the Army Fraud, Waste, and Abuse Hotline:
DSN 225-1578
(in Virginia) 800-572-9000
800-752-9747