AP
Microsoft CEO Satya Nadella
- On Wednesday, Microsoft announced that Microsoft Teams, Microsoft Power Platform and Dynamics 365 Customer Engagement will have versions made available for government use, and have been certified with higher government security certifications.
- These products are poised to help Microsoft in the bid for the Defense Enterprise Office Solutions contract, an $8 billion contract with the Department of Defense to help modernize its office and messaging software.
- Microsoft says it's still on track to achieve a certification for its Microsoft Azure cloud handle data of the highest impact level by the end of the first quarter of 2019.
Analysts say Microsoft is already the shoo-in to win an $8 billion contract with the Department of Defense. Now, it's released three new products for government use to reinforce its position.
Right now, Microsoft is bidding for the Defense Enterprise Office Solutions (DEOS) contract, via its reseller partners. This contract aims to help Department of Defense modernize its productivity software, which includes email, messaging, video chat, and the like. While Google offers similar services, Microsoft is the favorite to win.
On Wednesday, it announced new versions of Microsoft Teams, Microsoft Power Platform, and Dynamics 365 Customer Engagement - all ready for government use, complete with certification for data at higher government security levels. These could all sweeten the pot when it comes to DEOS.
Currently, analysts say Microsoft is the only company with products that fit the requirements of this contract - and that winning would only expand Microsoft's existing ongoing relationship with the government.
"What I can say is we've been working with the DOD for 40 plus years and have had a great partnership helping them with productivity and collaboration," Susie Adams, CTO of Microsoft Federal, told Business Insider. "We're now able to provide the innovations that are proven and secure to meet the DOD missions. We look forward to competing with DEOS."
The new products
Microsoft Teams, its instant messaging app, is now available to run on all government clouds, include that of the DoD. Microsoft also announced Dynamics 365 Customer Engagement for Government, software to help government users interact with their customers, which will be available in April.
Microsoft Power Platform, which helps people create custom applications and analyze data without writing code, will be available for government use this spring, says Microsoft.
These products were previously available to commercial customers, but now Microsoft has made them suitable for government use by ramping up its security certifications.
"What I can say is we're excited about the tools we've developed through the innovative work we've done to modernize collaboration and productivity," Adams said. "They're proven products that have secure technology built them into them."
Ramping up government certifications
Notably, Microsoft Power Platform is certified at FedRAMP High, the highest government security authorization, which allows this product to handle sensitive data from users in fields including law enforcement, emergency services, financial systems and health systems.
Both Dynamics 365 Customer Engagement for Government and Microsoft Teams can handle data at Impact Level 4, which means they can handle controlled unclassified information, like protected health information.
"We're committed to making sure the features and capabilities we deliver to our commercial customers, we also deliver to our government customers," Adams said.
All three of these products directly map to what DEOS is asking for in its request for bids - and, notably, Google, the only other major prospective competitor, lacks many of the necessary security certifications at the moment.
Adams declined to comment on the view that Microsoft is the only product suite that can win DEOS, but did say that these new products help it better serve government customers.
"We're excited because we do have Teams and these new capabilities," Adams said. "I don't think we can comment on whether anyone else can meet the requirements."
The bigger cloud picture
The highest security certification a company can achieve is impact level 6.
Right now, only Amazon Web Services has achieved that distinction for any of its products, but Microsoft says it's on track to achieve this certification for Azure Government Secret, its government cloud, by the end of the first quarter of 2019. That would allow Microsoft Azure handle secret classified data.
That, in turn, would boost Microsoft's place in the race for another, far more competitive Pentagon contract - the Joint Enterprise Defense Infrastructure (JEDI) contract, a $10 billion deal for which Amazon and Microsoft are duking it out.
Adams noted that Wednesday's news doesn't have much to do with JEDI, but said that there's more to come from Microsoft on the government technology front.
"We're continuing to take the innovations that we're delivering on a continual basis. We're not selling down as a company," Adams said.
Get the latest Microsoft stock price here.