By Brody Ford and Gregory Korte, Bloomberg
Salesforce Inc. will offer its Slack application to the federal government at a discounted rate, the latest software company to cut prices as the Trump administration aims to slash technology costs.
The team collaboration software will be available to federal agencies at as much as a 90% discount through November, the General Services Administration said Monday in a statement. This replaces lower, fragmented discounts negotiated on an agency-by-agency basis, GSA said.
Similar deals have been struck in recent weeks with companies including Adobe Inc. and Alphabet Inc.’s Google.
Josh Gruenbaum, the commissioner of the Federal Acquisition Service in the GSA, called those short-term deals a harbinger of longer-term, discounted contracts in the next fiscal year. By bringing the negotiations with software vendors into his agency — a process they’re calling OneGov — the Trump administration hopes to leverage the federal government’s massive purchasing power to get better pricing.
He declined to identify specific vendors for future deals, but said he’s not afraid to do a wholesale swap out of long-time federal software vendors if there’s better long-term value elsewhere. “There’s no product here that is too big or too small for us to engage in,” he said.
The federal government could also use its leverage to insist that software vendors add features. One of the biggest themes in those discussions is interoperability — making sure that agencies using one vendor’s project collaboration software can exchange data with another vendor at a different agency, Gruenbaum said.
Another component of the strategy is to deal with software publishers directly, instead of through middlemen. By buying software products out of the box, the federal government can save money on system integrators who charge a premium for customized versions of brand-name software, Gruenbaum said.
Driving the contract renegotiations are a series of executive orders from President Donald Trump, who has moved to consolidate purchasing in the GSA, encourage the use of more off-the-shelf products and overhaul federal procurement regulations.
Salesforce, which also makes tools for sales and customer service, is one of the largest vendors of software to the government. The reduced pricing may help inspire further adoption of Slack, which launched a government-specific edition in 2022. Google is also offering discounts to the government for its workplace apps which compete with incumbent Microsoft Corp.
“We are committed to finding new ways to support the government and ultimately the American people,” Salesforce’s public sector business chief Dave Rey said in the statement.
The Department of Government Efficiency, the Elon Musk-led effort to reduce federal spending, has said that many agencies are paying for more software licenses than they’re using, calling out vendors such as Adobe and ServiceNow Inc. in March. Last week, some senators re-introduced a bill which aims to change the government software procurement process to increase competition.
The GSA is led by Acting Administrator Stephen Ehikian, who is a former Salesforce Inc. executive. He did not participate in negotiating the contract, according to two people familiar with the negotiations who asked not to be named discussing internal matters.
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