Google has offered the U.S. federal government a significant 71% discount on its Workspace services through an agreement with the General Services Administration (GSA). This deal, effective until September 30, 2025, aims to reduce federal spending and potentially save government agencies up to $2 billion over the next three years.
The agreement marks a shift towards consolidated procurement, treating the federal government as a single customer rather than negotiating separate deals with individual agencies. GSA Acting Administrator Stephen Ehikian stated that this collaboration would secure lower prices for best-in-class technology across all federal agencies.
While Microsoft currently holds a dominant 85% of the U.S. government's software market share (as of 2021), Google is actively working to expand its presence by offering AI-powered features within Workspace, including tools from its Gemini model. This move aims to provide a competitive alternative and drive innovation in the government IT sector.