Alphabet Inc.’s Google and Amazon.com Inc. have found an avenue to profit from Elon Musk’s chaotic Department of Government Efficiency.
The companies’ lobbyists in Washington see their best opportunity yet to achieve one of their most elusive goals: prying loose Microsoft Corp.’s decades-long grip on the multi-billion-dollar government software business.
DOGE has identified that software business as a potential source of waste and overspending in the federal government. Amazon and Google, working largely through technology trade groups like NetChoice, are doing everything they can to highlight that message in an expanding lobbying campaign, and place the blame on Microsoft’s extensive contracts.
The trade groups are reaching out to members of the congressional “DOGE caucus” — lawmakers who support Musk’s efforts — and DOGE liaisons at various federal agencies, according to several people familiar with the lobbying effort.
Alex Haurek, a Microsoft spokesperson, said in a statement that it’s “concerning but unsurprising to see certain industry players trying to manipulate decision makers, through shadowy front groups, rather than competing transparently on price and quality.”
Google is seeking to become a bigger software provider for government agencies, many of which still rely on Microsoft’s legacy productivity tools such as Microsoft Outlook and Word. And Amazon, hoping to gain a bigger advantage in federal cloud computing, argues that Microsoft has unfairly elbowed out rivals by tying its cloud services to its software offerings.
It’s new terrain for these companies, whose connections within government agencies have little value when it’s the amorphous group led by Musk and mostly made up of young engineers calling the shots. There are signs that their efforts, including meetings with the General Service Administration’s acting administrator and former software executive Stephen Ehikian, are starting to pay off.
Federal Chief Information Officer Greg Barbaccia, a former executive of Peter Thiel’s company Palantir, on March 26 asked all federal agencies to create an inventory of their licenses with the government’s five biggest software providers, a list that Microsoft tops. Barbaccia described it as an effort to “stop wasteful spending.”
There’s a parallel effort in Congress. Senator Joni Ernst, an Iowa Republican who founded that chamber’s DOGE Caucus, is the lead co-sponsor of legislation that would direct federal agencies to consolidate their software licenses and adopt new enterprise license agreements. Ernst, who in November cited estimates that her effort could save some $750 million annually, did not respond to a request for comment. The House introduced its version of that bill in late March.
NetChoice, which counts Amazon and Google among its members, argued in a March letter to DOGE the importance of breaking Microsoft’s alleged “monopoly” over government software, which the group claims results in higher prices and “abysmal cybersecurity performance.”
Cost Questions
It is notoriously difficult to nail down exactly how much the US pays for information technology, but the Government Accountability Office found the federal government annually spends more than $100 billion on IT and cyber-related investments, including the purchase of software licenses.
Also difficult to ascertain is the extent of Microsoft’s government business. According to that report, Microsoft received 31% of 24 federal agencies’ spending on software licenses in fiscal year 2021, three times more than its closest rival, for a total of $2.4 billion.
Microsoft does not disclose extensive details on its business with the government.
One tech lobbyist whose clients oppose Microsoft expressed optimism about prospects for Amazon and Google in Musk’s cost-cutting crusade. DOGE has already criticized agencies for having more software licenses than they do employees and for paying too much for software.
Amazon declined to comment.
“We’ve said for ages that government IT needs more competition to save taxpayers money and improve security, so it’s no surprise that legacy players prefer the status quo and criticize those who want change,” said Google spokesperson José Castañeda.
Musk has shown he’s eager to rock the boat, even if it comes with an upfront cost.
Cyber Problems
Working against Microsoft — particularly with Musk’s band of Silicon Valley engineers — is its recent track record on cybersecurity.
In 2023, the company’s cloud environment was compromised by Chinese state-affiliated hackers, with tens of thousands of individual US government emails affected by the attack.
An April 2024 report by a government-appointed cyber advisory board that investigated the hack was sharply critical of Microsoft, particularly as victims of the breach included then-Commerce Secretary Gina Raimondo and State Department officials. Their emails were accessed just before a meeting between then-US Secretary of State Antony Blinken and Chinese President Xi Jinping
In July 2024, a global failure caused by a faulty update deployed by cybersecurity firm CrowdStrike Holdings Inc. onto Microsoft systems grounded airline flights and business operations around the world. To Microsoft’s competitors, the exposure provided an irresistible opportunity.
Chris Mohr, president of the Software Information Industry Association, said the government’s reliance on Microsoft has “led to systemic risk” because of the hacks. SIIA’s members include Google and Amazon.
DOGE, Mohr said, “has a point” that the software procurement process could be better.
Sales Pitch
NetChoice and other tech groups have tailored their outreach to DOGE’s priorities, proposing the anti-Microsoft measures to “save taxpayers billions of dollars in the coming year.” Among other recommendations, NetChoice suggested DOGE encourage agencies to open up contracts to more tech companies and prevent “predatory” licensing agreements.
“We were excited when DOGE was announced and said they’re looking for cost-cutting measures,” said Amy Bos, NetChoice’s director of state and federal affairs, who wrote the March 14 letter. “We had something that was perfectly lined up for this.”
Amazon and Google have claimed Microsoft unfairly locks the government into long-term, unfavorable contracts, potentially keeping billions in contracts from other its competition.
Microsoft has rejected that characterization. Haurek, the Microsoft spokesperson, said the company competes on federal contracts “just like our competitors by offering best-value products and services.”
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