Microsoft Inks $927 Million Contract with Pentagon

Christmas came a bit early in Redmond, Washington this year. The Department of Defense announced a massive $927 million software contract with Microsoft on Tuesday. Furthermore, the contract was awarded on a non-competitive basis. It will give the Pentagon and other related agencies access to the source code on all of Microsoft’s software packages.

Stock Photo: USA. WASHINGTON, DC NOVEMBER – 24, 2016: The Pentagon building, headquarters for the United States Department of Defense. (Miami2you /

According to a press release by the Defense Information Systems Agency, a portion of the contract includes the issuance of a ‘Blue Badge Cardholder support’. 

This is the highest level of after sales support offered by Microsoft and is utilized by only a few of the company’s portfolio of corporate and government accounts.

While it was highly unlikely that the Pentagon would ditch Microsoft for an open source solution, the fact that the Department of Defense has complete access to the company’s source code did raise some eyebrows.

Yet, industry experts noted that some sort of source code access is quite common when software companies are dealing with government agencies or large corporate buyers. 

Doing so allows the customer’s IT department to more fully monitor all the software running on a network. It also allows the opportunities to customize the software based on operating requirements.

Even more, one area where this could come in handy is security. Recently, the computer networks of the Pentagon are constant targets for hackers. In fact, military planners have become increasingly concerned about the possibility that some sort of cyber-attack. A serious cyber attack could cause considerable harm to the nation’s defenses. In turn, possibly rendering communication and other systems inoperable.

The probability of a large-scale attack is unlikely. However, it is noteworthy that systems running Microsoft’s, programs are considered more likely to be vulnerable.  In some ways, this is part and parcel with the company’s success as the dominant software company in the world. More importantly, Hackers prefer to write malicious code which can infect large number of computers such as those running Windows XP (which is remains widely in use) or Window 10.

Microsoft Hack
Stock Photo: New York City, U.S.A – February 3, 2014: The Blue Screen of Death is an error screen displayed after a fatal system error in the computer. (JaysonPhotography /

To combat the risks of cyber attacks the company has spent close to $1 billion in security initiatives. These security initiatives include the opening of cyber security outposts. Not to mention, hiring a number of experts in the area including ‘white hat’ hackers. In comparison to ‘black hat’ hackers. 

According to Bret Arsenault, Chief Information Security Officer at Microsoft, the company has used the investments to expand the capabilities. In addition, Microsoft is currently looking to explore ways to make its software more secure in an ever-changing world.

Similarly, In 2015 Microsoft CEO, Satya Nadella, outlined the company’s plans for building a security strategy. The mission is discover better ways to find and stop potential threats. 

John Podesta hack
Stock Photo: LAS VEGAS, NV – OCTOBER 13: Democratic presidential debates, Clinton chairman John Podesta interviewed in the spin rooom after the presidential debate at the Wynn (Joseph Sohm /

However, the investments are hamstrung by user carelessness. For example, the massive hack of John Podesta’s emails was linked to a phishing incident. A phishing hack occurs after a target clicks a link initiating a data breach.

Shares of Microsoft were up in early trading on Thursday morning.


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