The U.S. Environmental Protection Agency is subscribing to Microsoft's Office 365 cloud-based collaboration and communications applications under a four-year, $9.8 million contract.

Microsoft is working with Lockheed Martin to deploy the Office 365 for Government applications to approximately 25,000 EPA employees, the two companies said Wednesday.

A contract of that scope marks a significant victory for Microsoft against competing cloud applications from Google and other vendors.

[Related: Microsoft Offers Guidance On Transitioning To Cloud Computing]

The EPA is adopting Office 365 to replace the IBM Lotus Notes email software and several other IBM Lotus collaboration applications it is currently using, according to the agency.

Lockheed Martin, which has provided IT services to the EPA for 35 years, will manage the migration to the Office 365 applications, and provide engineering and ongoing integration services. Lockheed Martin expects to complete the primary email migration by early next year, the company said.

The Office 365 for Government service includes email, calendar, scheduling and collaboration applications and stores data in what Microsoft calls a "segregated community cloud." Lockheed said using the cloud-based, multi-tenant applications would save the EPA an estimated $12 million in energy costs during the life of the contract.

"There is tremendous potential in the cloud, not only for transforming the way government employees work, but also for helping agencies meet their environmental and energy efficiency goals," said Greg Myers, vice president of Microsoft Federal, in a statement.

With the new contract Microsoft said the EPA joins the Federal Aviation Administration, the Defense Information Systems Agency, and the U.S. Department of Agriculture among government agencies that use Microsoft cloud software.

PUBLISHED NOV. 1, 2012