Microsoft’s Billion Dollar Contract

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Reports are circling regarding a product deal between Microsoft and Amazon…

Amazon is supposedly looking to purchase Microsoft’s 365 E5 plan for 550,000 of its corporate employees and the F5 plan for 1 million front-line workers.

The total deal is expected to be valued at around $1 billion.

While the F5 plan is relatively cheap at $8 per month for a single user, the E5 is more than seven times the cost!

Based on the differences listed for Microsoft’s product lineup, it seems like cloud storage may be one of the big reasons to fork up extra dough.

Keep in mind that they also offer a cheap plan that provides the cloud storage for much less…

If we compare the cheaper E3 vs. the more expensive E5 offering we can see that the main difference is a focus on security and analytical capabilities from E5.

This must be an important feature for the company given that E3 goes for $21 cheaper per month…

That ends up being around a $138 million difference per year.

Keep in mind that Amazon spent much of 2023 cutting on costs.

I doubt that they will be throwing this amount of money out of the window on features they have no intention of utilizing.

One thing that doesn’t add up though is why the expected value for the deal is $1 billion…

We know what Microsoft charges per user per month for both E5 and F3.

If we do the math, the total yearly cost for Amazon should be around $472 million.

One possibility is that the two companies will be signing a multi-year contract…..Alternatively, there could be more to this deal than just Microsoft 365!

We’ll likely find out as new details continue to surface…

The transition is expected to commence this month and be completed by early 2024.

That’s all for now!

Until Next Time,


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