Why Governments Pay More for Software Than Private Companies

Lucas and Luna dig into a staggering inefficiency: governments at every level pay 30 to 50 percent more for identical software licenses than private companies. They use the specific example of Microsoft 365 — where the US federal government's contract price per user is nearly double what a mid-size business pays — and trace the root causes to procurement rules, bundled contracts, and the absence of competitive bidding in legacy renewals. The episode also explores why agencies like the Department of Defense end up on 'enterprise agreements' that lock them into five-year commitments with automatic price escalators. Luna pushes back on whether this is just a US problem, and Lucas points to the UK's Government Digital Service as a rare success story in driving down software costs through open standards and shorter contract terms. The conversation ends with a concrete takeaway: if you work in or with government, ask your procurement office whether they're benchmarking prices against private-sector equivalents — because in most cases, they aren't. #GovernmentSoftware #ProcurementWaste #Microsoft365 #PublicSpending #DigitalGovernment #TaxEfficiency #UKGovernmentDigitalService #EnterpriseAgreements #SoftwareLicensing #BundledContracts #Benchmarking #GovernmentInefficiency #Economics #FexingoBusiness #BusinessPodcast #FiscalPolicy #PublicFinance #CostSaving Keep every episode free: buymeacoffee.com/fexingo