The Queensland Government expects to save millions of dollars over the next three years after striking a AU$26.5 million deal with Microsoft to bring Office 365 to 149,000 of its employees across the state.
The deal is worth $13.7 million less over the three year period than the government's previous agreement with Microsoft, according to a government spokesperson.
The move comes as the state government works to undergo major infrastructure reforms to revamp its information and communications technology network while cutting costs.
Sharon Schoenborn, Microsoft Australia's Queensland state director, said in a blog post that the new deal represented a major step in the state's Information and Communications Technologies (ICT) Strategy 2013-2017 to transform its digital services.
Schoenborn said it allowed the Queensland Government to take a positive step towards the standardisation and simplification of ICT across government and enable "new forms of knowledge sharing, collaboration and interconnectivity".
The state's ICT Strategy 2013-2017 is a plan designed to improve services for Queenslanders through new, cost-effective technology and better use of government data analysis.
Queensland’s minister for IT, Ian Walker, said the new deal would allow the government to "move between computer and cloud-based software".
"This is the first whole-of-government contract in Australia to provide the flexibility to move between computer and cloud-based software, making the Queensland Government leaders in this area," said Walker in a statement.
"This new contract means that for the first time all government departments will have access to the same technologies, allowing for greater sharing and collaboration," he said. "Not only are we saving the taxpayers of Queensland millions of dollars, it's another positive step towards simplifying IT services across government."
In June last year, the Queensland Government confirmed plans to outsource its IT services to cut costs as part of a computer system overhaul, with the aim of saving money by moving away from owning and maintaining its own ICT assets.
At the time, Walker said a move to more cloud services would see the government save AU$17 million on the email component alone.