Google has announced a 71% discount on its Workspace business software for U.S. federal agencies, aiming to expand its presence in government contracts and compete with Microsoft’s dominance. The agreement, established with the General Services Administration (GSA), could result in up to $2 billion in cost savings if widely adopted.
The move aligns with cost-cutting initiatives within the U.S. government, designed to streamline federal spending. Unlike previous agreements made on an agency-by-agency basis, this new deal introduces government-wide volume pricing, making Google’s software more accessible.
While Microsoft controls approximately 85% of the government software market, Google is investing in advanced AI-powered tools within Workspace, leveraging its Gemini large language model to offer competitive features. Some agencies, such as the Air Force Research Laboratory, have already integrated Google’s platform.