Committee forwards $40 million Microsoft enterprise agreement to Board, citing volume discounts and cybersecurity benefits
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Summary
The Department of Technology’s request for a 39‑month citywide Microsoft enterprise agreement with Zones LLC (not to exceed $40M) was advanced to the Board with a positive recommendation; DT described negotiated discounts, projected savings, and a discretionary cybersecurity reserve.
The Budget & Finance Committee on May 20 voted 3–0 to forward a retroactive resolution authorizing a 39‑month enterprise agreement with Zones LLC for Microsoft cloud and enterprise products, with a not‑to‑exceed amount of $40,000,000.
Linda Garu, the city's chief information officer and executive director of the Department of Technology, said the agreement consolidates 26 departmental license contracts into one enterprise agreement covering Office 365, Azure, SQL Server and cybersecurity products. She said the department negotiated a government pricing discount plus an additional 2% discount, reduced unified support from 15% to 7% of contract value through negotiation, and cut more than 6,000 licenses to yield further savings.
Severn Campbell (BLA) noted the contract is retroactive to June 1 and summarized the department‑level spending allocations. He said the contract includes a $32,000,000 minimum commitment with a projected $4,000,000 for additional annual products and about $4,000,000 reserved for enhanced email security; discretionary cybersecurity enhancements would be subject to Board appropriation.
The committee approved the resolution to move the contract to the full Board with a positive recommendation. Staff said final spending would remain subject to future appropriation by the Mayor and Board of Supervisors.
