Microsoft Corporation (NASDAQ:MSFT)’s Partnership With Red Hat Inc (NYSE:RHT) Boosts Its Eligibility For Government Contracts

Microsoft Corporation (NASDAQ:MSFT) recently got into a partnership with Red Hat Inc (NYSE:RHT) and the relationship between the two firms may have increased the chances of the federal government wanting to subscribe to their services.

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Microsoft’s Azure platform is now the certified cloud provider for Red Hat. This means that Microsoft data centers and the Azure public cloud can be integrated into some of Red Hat’s products. One of the reasons why the partnership is thought to be more attractive for the government is because it no longer has to choose between Re Hat Products and Azure Government. A government analyst from Bloomberg stated that the partnership will most likely lead to more uptake of the Azure Government Cloud by Federal Agencies.

The two companies can also join their resources to make their services available to governments that are interested in being spoilt for choice without having to compromise on anything. Government data from Bloomberg shows that the contract obligations for Red Hat and Microsoft Azure were $73.9 million and $4.6 million respectively. According to analysts, there were no overlapping contracts but the new partnership between the two firms may cause some changes in the contract. The government will now enjoy more flexibility meaning the firms may get more out of the government contracts.

The partnership is also expected to present more opportunities to both firms in terms of coming up with more attractive services. The deal also highlights Microsoft’s ongoing transition and efforts to rebrand itself as a productivity company powered by cloud services. The efforts are also coming out as an attempt to focus more on attracting the government to subscribe to its services. Microsoft will benefit in various ways if the government uses its services. Of course, there is the monetary benefit but most importantly, the involvement of federal agencies will encourage businesses to also get on board. This is because it showcases a security and proficiency level high enough to attract the government.

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