Navy Will Get Its Microsoft Cloud Email from Dell in $2.1M Deal

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The Navy sees hundreds of millions of dollars in savings over the Next Generation Enterprise Network.

The Navy has tapped Dell to provide it with a Microsoft enterprise-as-a-service cloud email system for its reservists.

The Navy says the Microsoft cloud email pilot will save hundreds of millions of dollars as an alternative to the service’s Next Generation Enterprise Network, known as NGEN.

In mid-September, the Space and Naval Warfare Systems Center Pacific announced plans to award the email contract to one of four companies currently holding a contract on the General Services Administration blanket purchase agreement for cloud services.

The Navy disclosed the award made to Dell on Oct. 14.

The Dell award, made retroactive to Sept. 30, is valued at about $2.14 million -- $790,000 less than the $2.93 million SPAWAR Pacific anticipated.

The cloud contract has one base year and two one-year options for Microsoft Office 365. That covers 8,000 licenses in the first year and will grow to 54,000 in the second year, after competition for the additional licenses. The third year of the contract would be used to examine risk mitigation issues.

The cloud email pilot will also pioneer network architecture, including a “Cloud Access Point,” that will serve as a connection between NGEN and commercial cloud providers. It aims to create a “commercial peering point’’ to integrate the Navy network with “many different cloud services,” SPAWAR Pacific said.

The Navy said the pilot will be used to evaluate use of the Microsoft Cloud email for the entire Navy, which includes 800,000 Navy and Marine Corps users on the NGEN network

Running Naval Reserve Forces Command email on Navy's in-house NGEN would represent a net cost increase of $286.4 million over five years, while the cost of using enterprise email offered by the Defense Information Systems Agency would be $55.3 million over five years, SPAWAR Pacific projected.

It said using Microsoft Office 365 would save $16.9 million over five years, but did not disclose total costs

Tests during the first year of the contract will be used to gain “authority to operate” approvals required by the Federal Risk and Authorization Management Program, known as FedRAMP, SPAWAR Pacific said.

Defense Department organizations are only allowed to use cloud computing in conjunction with an authorized pilot. 

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