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ITEM 13

City Council Memorandum Information Technology Memo No. N/A

Date:

April 18, 2024

To:

Mayor and Council

Thru:

Joshua H. Wright, City Manager
Dawn Lang, Deputy City Manager - CFO
Sandip Dholakia, Chief Information Officer

From:

Molly Mahai, IT Chief Infrastructure Officer

Subject:

Purchase of Microsoft Software Licenses

Proposed Motion:

Move City Council approve the purchase of Microsoft software licenses, from CDW-G, utilizing the Omnia Partners Contract No. 2018011-01, for a period of three years, in an amount not to exceed $2,021,655 in the first year, and authorize the City Manager to execute an agreement with Microsoft Corporation for use of the licenses.

Background/Discussion:

The city has been implementing Microsoft (MS) O365 over the last few years and is currently operating under a G3 License model. The city's enterprise agreement with MS for the G3 License model includes:

MS productivity suite featuring: email, calendar, Teams, OneDrive, and SharePoint
Windows Server Operating System (licensing for servers in the datacenters)
MS Structured Query Language (SQL), licensing for SQL databases and reporting
User Multi-Factor Authentication for O365 and when working remotely

The Information Technology department recommends moving to the M365 G5 license model. This vision was discussed during the FY 2024-25 budget decision package process and an additional $801,950 ongoing is included in the Proposed FY 2024-25 budget to fund this transition. The M365 G5 License model is an enterprise-level cloud-based license model that includes:

All components of the G3 suite plus;
Additional productivity solutions
Enhanced security tools
Compliance features

The additional features improve the city's productivity, streamline maintenance/operations, elevate the security posture, and help the city with mandatory compliance standards that continue to evolve. Utilizing the Microsoft enterprise agreement provides secured pricing for the next three years and provides the city with industry standard versions of the Microsoft subscriptions and latest tools sets, available in the cloud or as a desktop application. Additionally, the subscription option allows the city to adjust user counts on an annual basis.

The city's license provider is offering a year one discount in the amount of $216,000 if the city enters into the three-year agreement in April 2024. This approach allows the city to accelerate implementation of the G5 License model features, giving access to enhanced security tools sooner.

Evaluation:

The City of Mesa, on behalf of Omnia Partners, competitively solicited and awarded a contract for information technology solutions and services to CDW-G. The city has a current agreement with Omnia Partners allowing for the cooperative use of its contracts.

Financial Implications:

Approval of this contract enables the city to enter into a three-year agreement that locks the price at not to exceed $2,021,655 annually. The FY 2024-25 Proposed Budget includes $801,950 ongoing for the G5 and Cloud Governance increased License costs for years two and three of the agreement.

Additionally, Microsoft agreed to a $216,000 discount for year one if the city enters into the three-year agreement in April 2024. Microsoft does not provide an enterprise agreement for a term less than three years. One-time funding has been identified in FY 2023-24 to allow funding of the increased licensing costs earlier.

Fiscal Impact

Account No.

Fund Name

Program Name

Dollar Amount

CIP Funded Y/N

101.1200.5419.0.0.0

General Fund

N/A

$56,648

101.1200.6316.0.0.0

General Fund

N/A

$372,000

101.1280.5419.0.0.0

General Fund

N/A

$184,022

101.1280.6316.0.0.0

General Fund

N/A

$561,200

403.1290.5419.0.0.0

Technology Replacement Fund

N/A

$74,275

101.2065.5419.0.0.0

General Fund

N/A

$11,725

101.1280.5511.0.0.0

General Fund

N/A

$26,000

401.1287.6316.0.6IT093

General Government Capital Projects

Microsoft Office 365

$337,936

101.1286.5419.0.6IC127.0

General Fund

Citywide Multifactor Authentication

$397,849