Microsoft (Nasdaq:MSFT) Lands USDA Cloud Computing Deal

Microsoft Corp. (Nasdaq:MSFT) has landed a major deal in their cloud computing segment, securing a agreement with the U.S. Department of Agriculture (USDA) to supply a variety of online applications to the government agency, including e-mail collaboration.

The USDA has approximately 120,000 employees.

By Microsoft standards the deal is tiny, as it is valued at $27 million over a period of three years, with an estimated savings of $6 million for the USDA during that time over the technology it's now using.

The key for those providing cloud computing services is to get their foot in the door with various government agencies in hopes of expanding across various government entities.

From a government standpoint, they've been migrating to cloud services because of the lower costs in a tough economic climate which isn't going to improve for years.

Competitors like Google (Nasdaq:GOOG) and Salesforce.com (NYSE:CRM) have complained of Microsoft being favored in these types of deals, the USDA's chief information officer Chris Smith responded, saying, they already had a large investment with Microsoft and its software, and it was taken as "an opportunity to parlay this investment into the cloud solution."