Why Government Software Licenses Cost More Than Buying

Lucas and Luna break down why governments pay vastly more for software licensing than buying outright. Using the US Department of Defense's $45 million spend on Microsoft Office licenses in 2025 as a case study, they explore how procurement rules, budget cycles, and vendor lock-in inflate costs. The episode reveals that the DoD's per-seat cost for Office 365 was nearly triple the commercial rate, and examines why switching to open-source alternatives like LibreOffice hasn't happened despite years of pilot programs. Lucas explains the concept of 'licensing inertia' and how it costs US federal agencies an estimated $2 billion annually in software overspend. Luna challenges whether mandates for 'commercial off-the-shelf' software are actually driving up costs instead of saving money. They wrap up discussing a 2024 Government Accountability Office report that found 80% of federal software licenses were underutilized, yet agencies kept renewing them. A sharp look at how public sector software buying is broken. #GovernmentSoftwareLicensing #PublicProcurement #DoDSpending #MicrosoftOffice365 #SoftwareCosts #VendorLockIn #LibreOffice #OpenSource #BudgetWaste #GAOReport #LicensingInertia #TaxpayerMoney #Economics #GovernmentSpending #FexingoBusiness #BusinessPodcast #FreeSoftware #CommercialOffTheShelf Keep every episode free: buymeacoffee.com/fexingo