Google to offer its Workspace suite to the US government at a 71% discount

In a move that could reshape public-sector IT procurement, Google has entered into a landmark agreement with the US General Services Administration (GSA), offering its Workspace productivity suite to all federal agencies at discounts of up to 71%.

Effective through September 30, 2025, this pricing applies across agencies regardless of size or volume and includes both Google Workspace Enterprise Plus and Assured Controls Plus — pairing productivity tools with advanced security features required for sensitive government operations.

“This common-sense pricing reflects GSA’s role as a central procurement hub, leveraging purchasing power to reduce redundancy and streamline IT acquisition,” the GSA said in a statement.

The federal government, acting as a single customer, bypasses traditional agency-by-agency negotiations. This shift underscores Google’s strategy to prioritize long-term positioning in the public sector — traditionally a stronghold of Microsoft — over immediate profits.

“This is less about direct monetization and more about gaining a strategic foothold in a sector long dominated by Microsoft,” said Sanchit Gogia, chief analyst and CEO at Greyhound Research. “The US government is the most scrutinized technology customer in the world. Convince them, and you open doors across global public-sector and regulated industries.”

About $2 billion in savings

According to Google, if adopted government-wide, the agreement could save agencies approximately $2 billion over three years. This comes amid a broader initiative by the Department of Government Efficiency (DOGE) to cut federal IT spending and modernize procurement processes.

“This new approach allows Google to treat the federal government as one unified customer,” GSA Acting Administrator Stephen Ehikian said in the statement. “It’s about securing lower prices for top-tier technology across the board.”

According to Neil Shah, VP for research and partner at Counterpoint Research, the deal is significant for Google to expand into the public sector, simplifying the business model and any price-related friction by viewing the US federal government as one customer. “For government, this is all about cost savings and simplification at scale and having an alternate vendor diversifying its IT software and systems.”

Challenging the status quo

For years, federal IT has been dominated by a handful of providers, largely due to the complexity of compliance requirements and established vendor relationships. Google’s agreement is poised to disrupt this balance, especially as it comes equipped with FedRAMP High Authorization — a key certification for working with sensitive government data.

Notably, Google emphasized the inclusion of Gemini — its AI assistant — as the first to receive FedRAMP High Authorization. This directly challenges competitors who are increasingly baking AI capabilities into government offerings.

“This is not just about matching features—it’s about aligning with evolving government IT policies,” said Gogia. “Standardized pricing undermines a key advantage of incumbent providers: their strong ties to individual agencies.”

“Every agency can now benefit from enterprise-level pricing, no matter how small,” GSA Federal Acquisition Service Commissioner Josh Gruenbaum said in the statement.

Shah added that the compliance milestone makes Google a serious contender in global public-sector engagements. “This sets a precedent that could build trust with other governments worldwide,” he noted.

Implications for enterprise customers

Beyond the public sector, the deal sends a powerful message to enterprise IT buyers. Google’s aggressive pricing strategy highlights its focus on expanding market share rather than maximizing short-term profits.

“This kind of discounting doesn’t stay in Washington — it reaches enterprise boardrooms,” Gogia remarked. “That 71% figure tells CIOs globally to push harder during contract renewals and evaluations.”

The bundling of AI tools like Gemini, NotebookLM, and Advanced Gemini 2.0 at no added cost is another compelling hook. These offerings, once considered premium, are now table stakes — potentially pressuring other vendors to match.

More than half of CIOs — 53%, according to Greyhound Pulse 2025 — plan to use public-sector pricing disclosures to negotiate better commercial deals. One Fortune 100 firm already leveraged the Workspace discount to re-benchmark terms for over 120,000 Microsoft 365 licenses.

The deal also underscores Google’s security credibility, previously seen as a barrier for adoption in sensitive enterprise environments. “With FedRAMP High certification, Google shows it can meet the strictest standards,” said Gogia.

The road ahead

The agreement runs until September 30, 2025 — a window during which Google aims to rapidly expand its public-sector footprint. The temporary nature of the discount adds urgency, both for federal buyers and for Google’s competitors to respond.

Yet challenges remain. Microsoft’s deep integration in government and enterprise environments gives it a strong foothold. “Breaking Microsoft’s lock-in won’t be easy,” said Shah. “It’s not just about tools — it’s about years of workflows, data structures, and platform dependence.”

Gogia echoed that sentiment, noting the difficulty of dismantling entrenched systems like Active Directory configurations and Power Platform automation. “You’re not flipping a switch — you’re unbundling years of technical and operational decisions,” he said.

Still, for enterprise customers facing contract renewals, this deal provides new leverage. Google’s willingness to trade margin for momentum can be used to reset expectations across the board. “While Google plays the price disruptor, expect Microsoft to respond with value bundling,” Gogia predicted. “You’ll see accelerated integration of Copilot into Teams and Microsoft 365, aimed at locking in customers with AI-enhanced workflows.”