Google is offering significant discounts on its Workspace business software to U.S. federal agencies, positioning itself to benefit from the Trump administration’s aggressive push to reduce government spending and aiming to erode Microsoft’s stronghold on federal software contracts.
This strategic move coincides with President Donald Trump’s initiative to streamline government operations through the Department of Government Efficiency (DOGE), led by billionaire ally Elon Musk. The DOGE team is focused on downsizing agencies and canceling unnecessary contracts.
Google announced Thursday that it has reached an agreement with the U.S. General Services Administration (GSA) to provide a 71% discount on Workspace. If adopted government-wide, this could translate into up to $2 billion in savings for federal agencies.
The GSA, responsible for managing federal properties and services, was one of the early targets of DOGE-led downsizing efforts. In a statement, the agency said, “The Workspace agreement marks a step forward in GSA’s work with Google and other companies to create cost savings for the federal government.”
Unlike previous pricing models that varied by individual agency, this deal offers volume-based pricing calculated across the entire federal government, potentially giving agencies more buying power and uniform cost reductions.
These discounts are valid through September 30 and could give Google a stronger foothold in a space long dominated by Microsoft, which controlled around 85% of the U.S. government software market in 2021, according to research firm Omdia.
To compete more aggressively, Google has been enhancing its Workspace suite by integrating advanced AI tools powered by its Gemini large language model, making it more appealing to both enterprise and government clients.
Google also noted that some federal institutions, such as the Air Force Research Laboratory—serving both the U.S. Air Force and U.S. Space Force—have already been using Workspace products since 2021.
