Texas Lassos Office 365

The state of Texas has struck a deal with Microsoft to make the vendor's cloud-based Office 365 applications available to more than 100,000 state employees.

The deal calls for Microsoft to provide email, collaboration, web conferencing and document and calendar sharing to Texas state agencies, as well as to municipal and county government. Microsoft called the agreement the largest statewide deployment of email and collaboration services to date.

To close the deal, Microsoft agreed to establish a data center in San Antonio and attach a "security addendum" to the contract. The agreement requires that Microsoft employees with access to the data center undergo FBI background checks.

[ Wonder what extras the latest Microsoft cloud apps offer? Read Microsoft Office 2013 Gains Free Bing Apps. ]

The addendum aims to assure compliance with Health Insurance Portability and Accountability Act (HIPAA) and Criminal Justice Information Systems (CJIS) requirements. The state's Department of Criminal Justice, Alcoholic Beverage Commission, Department of Insurance, and Health and Human Services System require access to data that is subject to strict security and privacy regulation, according to Microsoft.

Todd Kimbriel, director of the Texas Department of Information Resources (TDIR), said in an interview that he believes the agreement for extra security measures is the first of its kind. Microsoft is incorporating both physical and procedural controls in the San Antonio data center, he said.

Some Texas agencies, including the Health and Human Services System and the departments of Information Resources, Insurance, Motor Vehicles, and Transportation, already use Office 365. The Alcoholic Beverage Commission and Department of Criminal Justice are expected to tap the Microsoft apps next.

The state's 125 agencies aren't required to adopt Office 365, so the business case has to sway them. Kimbriel calculates Office 365 is 75% cheaper than the email systems already in use at state agencies. "We have 125 IT departments and CIOs, but we can't force" them to switch, he said. "We have to come up with better products and solutions, better value."

The initial focus is on the 28 largest agencies. For every 10,000 mailboxes moved to Office 365, the price goes down a penny per mailbox per month, Kimbriel said.

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