# The deal, called the Core Enterprise Technology Agreement, is not new ‌spending.

*business · news · 2026-05-27 · Reuters*

## Key points

- The Core Enterprise Technology Agreement consolidates Pentagon Microsoft 365 and cloud contracts into one deal.
- This agreement leverages existing budgets with no new spending required for the Pentagon.
- Officials aim to eliminate duplicative software contracts that accumulated from years of independent procurement.
- Microsoft now has an enterprise-wide presence across all branches of the U.S. armed forces through this deal.

The ⁠cost-cutting effort hands Microsoft a guaranteed ​enterprise-wide foothold across the U.S. armed ​forces while squeezing out duplicative spending that officials said had quietly ballooned across years ​of fragmented, go-it-alone procurement. Sign up here. The deal, called ​the Core Enterprise Technology Agreement, is not new ‌spending ⁠because baskets of Pentagon software contracts came up for renewal simultaneously. The funds come from existing budgets ​already being ​used to ⁠purchase Microsoft 365 subscriptions — covering email, Word, Excel, PowerPoint ​and related tools — along with ​cloud ⁠subscriptions and on-premises licensing, into one place where the full purchasing weight ⁠of ​the department can ​be used to drive down costs. Reporting by Mike Stone ​in Washington, Editing by Rosalba O'Brien Our Standards: The Thomson Reuters Trust Principles., opens new tab Mike Stone is a Reuters reporter covering the U.S. arms trade and defense industry. Most recently Mike has been focused on the Golden Dome missile defense shield. Mike also spends a lot of his time writing on Ukraine and how industry has adapted, or faltered as it supports that conflict. Mike, a New Yorker, has extensively covered how the U.S. has supplied Ukraine with weapons, the cadence, decisions and milestones that have had battlefield impacts. Before his time in Washington Mike’s coverage focused on mergers and acquisitions for oil and gas companies, financial institutions, defense companies, consumer product makers, retailers, real estate giants, and telecommunications companies.

**Companies:** Microsoft
**Countries:** United States

[Read the full story on Reuters](https://www.reuters.com/business/pentagon-awards-microsoft-97-billion-deal-bid-cut-costs-end-license-sprawl-2026-05-27/)

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