Google to cut down on business software prices for US federal agencies

As Google looks to capitalize on the Trump administration's cost-cutting push, the tech giant is going to offer steep discounts to U.S. federal agencies for its business apps package and gradually take away Microsoft's longstanding grip on the government software market. Google and the federal government have announced an agreement that makes Google Workspace available to all agencies at a significant discount, trimming 71 percent from the service's subscription price tag.

Google-GSA agreement

Since Donald Trump returned to the White House, the government has engaged in a campaign of staffing reductions and program cancellations, with the aim to reduce federal spending and as part of Elon Musk’s DOGE initiative. Having recognized this opportunity, Google negotiated with the General Services Administration (GSA) to offer Workspace at a lower price. Google claims the deal could yield up to $2 billion in savings.

Google has previously offered discounts for federal agencies interested in migrating to Workspace, but it saw little success displacing Microsoft. The Windows maker has enjoyed decades as an entrenched tech giant, leading the 365 productivity tools to proliferate throughout the government.

While Google has gotten some agencies on board, Microsoft has traditionally won the lion's share of contracts, including the $8 billion Defense Enterprise Office Solutions contract that pushed Microsoft 365 to all corners of the Pentagon beginning in 2020.