Microsoft has changed its licensing policies in a deal which will put 100,000 city of New York staff on its cloud services platform.

Under the terms of the deal the city will consolidate the 40 or more different software licenses it currently has with Microsoft into a single agreement and will shift its workforce onto cloud services. The five year deal will save the city millions according to Mayor Bloomberg.

"To deliver services efficiently and function at the highest level, City employees need the same technological resources that top private sector businesses provide to their employees," he said.

"Through our partnership with Microsoft, we've found ways to offer our employees Microsoft's newest, state-of-the-art computing tools while reducing costs to taxpayers. By capitalizing on the City's buying power, consolidating dozens of separate City agency license agreements into a single one, and paying for software based on use, we'll save $50 million over the next five years."

Previously 40 different city organizations had run their own application systems and the move to consolidate is part of New York’s Citywide IT Infrastructure Services program (CITISERV), which will consolidate the City's separate agency datacentres into a centrally-managed facility.

The contract will be a big boost for Microsoft, which is facing stiff competition from Google in its government business.

"With Microsoft's latest cloud-based productivity and collaboration tools, New York City employees will benefit from having better access to information, improved collaboration and information sharing among city agencies," said Microsoft chief executive Steve Ballmer.

“Additionally, this comprehensive partnership provides the latest in operating system, server and development tools laying a foundation for greater innovation and infrastructure modernization."

The news came the day after Microsoft announced the planned launch of its Office 365 cloud offering.

Source: http://www.v3.co.uk/v3/news/2271949/microsoft-scores-massive-cloud