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The government of Israel has announced it has extended its partnership with Microsoft. On Tuesday, the country said it has singed a new software agreement with the Redmond giant. Under the terms of the deal, Microsoft will continue to provide the software underpinning of Israel computing infrastructure.

Perhaps the announcement is a surprise. Just a few months ago, Israel said it would not renew its contract with Microsoft. At the time, the nation said changes in licensing terms meant the software would double in price.

When complaining about the new licensing in August, the government said it was then paying 100 million shekels ($27 million, $1 = 3.6896 shekels) to use Microsoft’s Office productivity suite and Windows server software in its offices.

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No financial information regarding the new deal has been announced, so it is unclear whether Israel decided to pay, or Microsoft lowered its price. However, the Finance Ministry says the new contract stays within the boundaries of planned government spending.

Under Israel’s previous term, the country purchased the software from Microsoft and was free to use as it wanted. Microsoft wanted to switch to a subscription and move data to the cloud. No details of the new arrangement have been announced, although the government says the previous contract is largely intact.

Microsoft would certainly not have wanted to lose a contract from a major government customer. It is likely the company made enough concessions to appease Israeli financers to close the deal.

German Contract

Earlier this year, Microsoft gained a major government contract in Germany. Lower Saxony announced it will ditch open source Linux support and move to Windows 10. This decision followed the same path taken by Munich, the Bavarian city abandoned Linux in 2017.

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