Google Offers Agencies 71% Discount to Switch From Microsoft

• The U.S. General Services Administration (GSA) reached an agreement with Google to lower the costs of Workspace for federal agencies.
• The 71% discount aligns with the government’s ongoing cost-cutting initiative.
• The deal could help Google advance in a market traditionally dominated by Microsoft.

In a bid to onboard new Workspace customers, Google is offering government agencies a 71% discount as part of an agreement with the U.S. General Services Administration (GSA).

The offer could significantly undercut Microsoft, whose rival 365 suite has traditionally dominated government software contracts.

GSA Negotiates Google Workspace Offer

Through a partnership announced on Thursday, April 10, for a limited time, Google will offer Workspace to every federal agency for a 71% price reduction

The Workspace agreement marks a step forward in GSA’s work with Google and other companies to create cost savings for the federal government.

The deal reflects the GSA’s efforts to negotiate contracts for the whole government rather than each agency reaching separate agreements

“This common-sense pricing model reflects GSA’s growing role as a central hub for government procurement,” the agency said in a statement

Taking Advantage of DOGE Saving Drive

As an independent agency responsible for orchestrating administrative functions across government, the GSA has been involved in the Department of Government Efficiency’s (DOGE) cost-cutting drive.

Although he insisted “there is no DOGE team inside of GSA,” acting GSA Administrator Stephen Ehikian recently acknowledged coordinating with Elon Musk’s government efficiency unit.

The GSA statement on the Google agreement reflects the DOGE philosophy, with promises to “streamline IT acquisition” and secure optimal pricing.

While the GSA’s efficiency push could lead to smaller checks for some software vendors, Google has embraced the opportunity to expand its business with the federal government.

Taking on Microsoft

Google’s move to onboard more federal customers represents an incursion into territory traditionally controlled by Microsoft.

According to government procurement records, the value of Microsoft’s federal contracts stood at $517 million in 2024. In contrast, Google’s government contracts generated just $6 million.

Across government, Microsoft 365 has 93 authorizations versus Google Workspace’s 14 .

However, as the government looks to cut costs, Google’s deal with the GSA could prompt some agencies to switch providers.

Beyond office software, the latest deal with the GSA could also lay the groundwork for Google to expand its presence in government cloud services, another area where it competes with Microsoft for business.