Defence commits to five more years of Azure worth $495m

Defence is set to spend at least $100 million annually on Microsoft Azure services until 2030.

Under a new five-year agreement, starting on September 1, Defence has committed to consume $495 million of Azure-based services.

This latest contract appears to replace a previous three-year arrangement, which expired on June 30 and was worth $107 million.

Like its apparent predecessor, the new agreement was secured through the government’s exclusive Microsoft licence reseller Data#3, via the Software and ERP Marketplace Panel.

Defence was unable to comment on the new deal by the time of publication. 

The agreement shows that while Defence has committed over $2 billion to rival Amazon Web Services (AWS) for a classified cloud service supporting the Australian Signals Directorate (ASD), it still plans to host some significant enterprise workloads in Microsoft Azure.

Primarily, Azure will support Defence’s in-progress SAP-based Enterprise Resource Planning (ERP) platform, which recently went live with modules for logistics, maintenance, finance and procurement.

In tandem, Defence has a Microsoft 365 environment known as Vera that is also being expanded.

Defence CIO Chris Crozier outlined his ambition to transition to more cloud-based productivity, unified communications, and collaboration tooling in the M365 ecosystem late last year.

Speaking on the iTnews Podcast last year, Crozier also expressed interest in adopting Microsoft Copilot, but admitted Defence’s current environment is “not [yet] architected” for the tool.

Meanwhile, in the past week, Defence committed to additional major technology contracts, including $59 million for Citrix services over three years and $11 million for a one-year deal with Oracle.