The deal has a five-year base and a five-year option to extend, and could be worth up to almost $21.9 billion over the full 10 years. The Army’s initial objective is to provide systems for its entire Close Combat Force (CCF), which will mean making more than 120,000 devices, Microsoft said.
Microsoft worked closely with the Army to create the devices and software that goes with them, which are designed to provide soldiers in the Close Combat Force with “improved situational awareness, target engagement, and informed decision-making necessary to achieve overmatch against current and future adversaries,” the Army said.
Wall Street, however, will likely approve. In addition to deepening its relationship with the US Department of Defense, the deal demonstrates the opportunity for Microsoft to monetize its AR and HoloLens technology, Wedbush analyst Dan Ives said in a note to investors Wednesday.
Ultimately, Microsoft could “expand the use cases across the enterprise (R&D, healthcare) and consumer landscape especially with price points expected to come down over the coming year,” Ives said.