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Australia and Microsoft Forge New Five-Year Cloud and AI Partnership to Advance Digital Government
Federal Digital Transformation Agency renews and expands volume sourcing agreement with Microsoft to accelerate cloud adoption and artificial intelligence integration across government services
The Australian Government has embarked on a strengthened partnership with Microsoft, signing a new five-year Volume Sourcing Agreement designed to accelerate the nation’s digital government agenda through expanded cloud and artificial intelligence (AI) deployment.
The Digital Transformation Agency announced the agreement on Thursday, reaffirming Australia’s commitment to modernising public sector information technology systems and enhancing service delivery to citizens.
Under the renewed arrangement, Microsoft will continue to provide cloud computing, productivity and AI-enabled services to federal agencies, supporting Australia’s transition from legacy systems toward more agile, secure and innovative digital platforms.
The new contract is intended to deliver greater consistency, value and technological capability across government, enabling agencies to harness the latest advances in cloud and AI to improve operational efficiency, cybersecurity resilience and user experience.
The agreement builds on a long-standing relationship between the government and Microsoft.
In recent years, the volume sourcing deal has grown substantially from its original value, reflecting heightened demand for solutions such as Microsoft Azure, Microsoft 365 and integrated AI tools.
The federal government’s adoption of these technologies has included enterprise-wide trials of generative AI capabilities and increased investment in cloud infrastructure to support productivity gains across core functions.
Senior government officials emphasised that broadening cloud adoption and embedding AI responsibly are central to the national digital transformation strategy, enabling more seamless, secure and user-centred services for Australians.
In line with this vision, the partnership with Microsoft aims to underpin future digital initiatives and contribute to the government’s broader Data and Digital Government Strategy, which prioritises interoperability, data-driven decision-making and trust in digital services.
The renewed five-year sourcing agreement reflects both parties’ shared commitment to innovation, government modernisation and public value.
It reinforces Australia’s leadership in digital government and ensures federal agencies remain positioned to leverage cloud-native technologies and AI-driven insights in delivering services that are simpler, faster and more effective for citizens.
The Digital Transformation Agency announced the agreement on Thursday, reaffirming Australia’s commitment to modernising public sector information technology systems and enhancing service delivery to citizens.
Under the renewed arrangement, Microsoft will continue to provide cloud computing, productivity and AI-enabled services to federal agencies, supporting Australia’s transition from legacy systems toward more agile, secure and innovative digital platforms.
The new contract is intended to deliver greater consistency, value and technological capability across government, enabling agencies to harness the latest advances in cloud and AI to improve operational efficiency, cybersecurity resilience and user experience.
The agreement builds on a long-standing relationship between the government and Microsoft.
In recent years, the volume sourcing deal has grown substantially from its original value, reflecting heightened demand for solutions such as Microsoft Azure, Microsoft 365 and integrated AI tools.
The federal government’s adoption of these technologies has included enterprise-wide trials of generative AI capabilities and increased investment in cloud infrastructure to support productivity gains across core functions.
Senior government officials emphasised that broadening cloud adoption and embedding AI responsibly are central to the national digital transformation strategy, enabling more seamless, secure and user-centred services for Australians.
In line with this vision, the partnership with Microsoft aims to underpin future digital initiatives and contribute to the government’s broader Data and Digital Government Strategy, which prioritises interoperability, data-driven decision-making and trust in digital services.
The renewed five-year sourcing agreement reflects both parties’ shared commitment to innovation, government modernisation and public value.
It reinforces Australia’s leadership in digital government and ensures federal agencies remain positioned to leverage cloud-native technologies and AI-driven insights in delivering services that are simpler, faster and more effective for citizens.
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