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Home My WebLink AboutStaff Report 2510-5289CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, January 12, 2026 Council Chambers & Hybrid 5:30 PM Agenda Item 7.Approve the City Manager or Designee to Execute Purchase Order C26196045 with Insight Public Sector, Utilizing a County of Riverside Cooperative Contract ITARC-00930, to Procure Microsoft Enterprise Software Licensing, Cloud Services, and Server/Data Center Licensing for a 3-Year Term with a maximum Total Not-To-Exceed Amount of $2,506,936, inclusive of a Contingency in the Amount of $50,000 Annually. City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: IT Department Meeting Date: January 12, 2026 Report #:2510-5289 TITLE Approve the City Manager or Designee to Execute Purchase Order C26196045 with Insight Public Sector, Utilizing a County of Riverside Cooperative Contract ITARC-00930, to Procure Microsoft Enterprise Software Licensing, Cloud Services, and Server/Data Center Licensing for a 3-Year Term with a maximum Total Not-To-Exceed Amount of $2,506,936, inclusive of a Contingency in the Amount of $50,000 Annually. RECOMMENDATION Staff recommends that City Council approve and authorize the City Manager or designee to execute Purchase Order C26196045 with Insight Public Sector, utilizing the County of Riverside Cooperative Contract ITARC-00930, to procure Microsoft 365 enterprise licensing, Azure cloud services, Microsoft security and collaboration tools, server and SQL licensing, and related support services for a 3-year term (February 1, 2026 to January 31, 2029) with a base contract amount of $2,356,936 and an additional $50,000 annual contingency to accommodate potential increases in Microsoft licensing or cloud usage needs (Attachment A). BACKGROUND On February 24, 2020, City Council approved a 3-year contract with Insight Public Sector, leveraging the County of Riverside Enterprise Agreement for Microsoft products and services1. The County of Riverside’s master agreement allowed the City to secure significant discounts through cooperative purchasing, exempt from Palo Alto’s competitive solicitation requirements under PAMC 2.30.360(j). 1 February 24, 2020 City Council Staff Report no. 10946, Item no. 7: https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2020/id-10946.pdf?t=53319.98s On January 30, 2023, Council approved Amendment No. 1 to Contract C20177991, extending the term for another three years for $1.7 million through January 20263. This extension continued Microsoft G3/G5 enterprise licensing, Azure cloud commitments, and security add- ons such as Defender and Power BI. During this period, the City implemented expanded cybersecurity protections, deployed cloud-based backups, and utilized Microsoft scheduling and data services to support emergency response and business continuity. ANALYSIS Table 1: Three-Year Cost Breakdown Contract Year Term Period Amount Total $2,356,936 Note: Amounts shown above represent the base contract costs only and do not include the additional $50,000 annual contingency. Totals have been rounded to the nearest whole dollar and may not equal the sum of the individual line items due to the rounding of individual cents. 3 January 30, 2023 City Council Staff Report, Item no. 2: https://www.paloalto.gov/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020/id-10946.pdf?t=53319.98 $2.36 million is 39.7% higher than the prior three years of $1.7 million. This price increase reflects growth and true-ups in the City’s license counts and security add-ons implemented during the prior term (e.g., expanded M365 licensing, security tools such as Microsoft Defender and related protections), and higher subscription-based consumption costs, including Azure cloud services and associated storage/backup usage that scale with operational demand. The proposed amount reflects current licensing requirements and the City’s projected cloud and security needs over the next three-year term to avoid service disruption and maintain compliance with Microsoft licensing requirements. By leveraging the Riverside agreement, the City secures competitive discounts on software licensing, cloud subscriptions, and security add- ons, while streamlining contract management and ensuring compliance with Microsoft licensing requirements. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW Quality Act (CEQA) under CEQA Guidelines section 15061(c)(3).  ATTACHMENTS APPROVED BY: 1 of 5 11/13/2025 City of Palo Alto Date:November 6, 2025 Robertson, Christopher Enrollment:68000857 (480) 409-6775 http://www.insight.com/azureterms Customer understands and acknowledges that it is obtaining the software Products directly from Microsoft Corporation and that Insight provides no warranty to Customer covering the Products purchased hereunder. All warranties relating to such Products are granted solely by Microsoft Corporation. Confidential.Cover Thank you for the opportunity to quote. 11/13/2025 Page 2 of 5 City of Palo Alto Quotation:1125-PaloAlto-Budgetary-Renewal-V5-MSEA-FA Date:November 6, 2025 Enrollment:68000857 Contract:ITARC-00930 Part Number Item Name Level Purchase Period Pool Product Type Quantity Unit Price Additional Products 9GS-00135 CIS Suite Datacenter Core ALng SA 2L D Added at Signing Servers Software Assurance 24 183.88$ 4,413.12$ 9GA-00313 CIS Suite Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 248 39.19$ 9,719.12$ 359-00961 SQL CAL ALng SA User CAL D Added at Signing Servers Software Assurance 1000 37.73$ 37,730.00$ 810-04760 SQL Server Enterprise ALng SA D Added at Signing Servers Software Assurance 15 1,552.99$ 23,294.85$ 228-04433 SQL Server Standard ALng SA D Added at Signing Servers Software Assurance 12 162.27$ 1,947.24$ 9EP-00208 System Center DC Core ALng SA 2L D Added at Signing Servers Software Assurance 56 53.97$ 3,022.32$ 9EN-00198 System Center Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 304 19.78$ 6,013.12$ QEJ-00003 Visual Studio Ent with GitHub ALng SA D Added at Signing Applications Software Assurance 2 1,077.53$ 2,155.06$ QEK-00003 Visual Studio Pro with GitHub ALng SA D Added at Signing Applications Software Assurance 1 308.67$ 308.67$ 6VC-01254 Win Remote Desktop Services CAL ALng SA UCAL D Added at Signing Servers Software Assurance 20 26.13$ 522.60$ 9EA-00278 Win Server DC Core ALng SA 2L D Added at Signing Servers Software Assurance 140 139.19$ 19,486.60$ 9EA-00279 Win Server DC Core ALng SASU 2L Win Server Std D Added at Signing Servers SA Step Up 484 274.16$ 132,693.44$ 9EM-00270 Win Server Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 506 21.37$ 10,813.22$ Year One Subscriptions Total:533,526.00$ Additional Products 9GS-00135 CIS Suite Datacenter Core ALng SA 2L D Added at Signing Servers Software Assurance 24 183.88$ 4,413.12$ 9GA-00313 CIS Suite Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 248 39.19$ 9,719.12$ 359-00961 SQL CAL ALng SA User CAL D Added at Signing Servers Software Assurance 1000 37.73$ 37,730.00$ 810-04760 SQL Server Enterprise ALng SA D Added at Signing Servers Software Assurance 15 1,552.99$ 23,294.85$ 228-04433 SQL Server Standard ALng SA D Added at Signing Servers Software Assurance 12 162.27$ 1,947.24$ 9EP-00208 System Center DC Core ALng SA 2L D Added at Signing Servers Software Assurance 56 53.97$ 3,022.32$ 9EN-00198 System Center Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 304 19.78$ 6,013.12$ QEJ-00003 Visual Studio Ent with GitHub ALng SA D Added at Signing Applications Software Assurance 2 1,077.53$ 2,155.06$ QEK-00003 Visual Studio Pro with GitHub ALng SA D Added at Signing Applications Software Assurance 1 308.67$ 308.67$ 6VC-01254 Win Remote Desktop Services CAL ALng SA UCAL D Added at Signing Servers Software Assurance 20 26.13$ 522.60$ 9EA-00278 Win Server DC Core ALng SA 2L D Added at Signing Servers Software Assurance 140 139.19$ 19,486.60$ 9EA-00279 Win Server DC Core ALng SASU 2L Win Server Std D Added at Signing Servers SA Step Up 484 274.16$ 132,693.44$ 9EM-00270 Win Server Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 506 21.37$ 10,813.22$ Year Two Subscriptions Total:533,526.00$ Additional Products 9GS-00135 CIS Suite Datacenter Core ALng SA 2L D Added at Signing Servers Software Assurance 24 183.88$ 4,413.12$ 9GA-00313 CIS Suite Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 248 39.19$ 9,719.12$ 359-00961 SQL CAL ALng SA User CAL D Added at Signing Servers Software Assurance 1000 37.73$ 37,730.00$ 810-04760 SQL Server Enterprise ALng SA D Added at Signing Servers Software Assurance 15 1,552.99$ 23,294.85$ 228-04433 SQL Server Standard ALng SA D Added at Signing Servers Software Assurance 12 162.27$ 1,947.24$ 9EP-00208 System Center DC Core ALng SA 2L D Added at Signing Servers Software Assurance 56 53.97$ 3,022.32$ Confidential.EA At Signing Thank you for the opportunity to quote. 11/13/2025 Page 3 of 59EN-00198 System Center Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 304 19.78$ 6,013.12$ QEJ-00003 Visual Studio Ent with GitHub ALng SA D Added at Signing Applications Software Assurance 2 1,077.53$ 2,155.06$ QEK-00003 Visual Studio Pro with GitHub ALng SA D Added at Signing Applications Software Assurance 1 308.67$ 308.67$ 6VC-01254 Win Remote Desktop Services CAL ALng SA UCAL D Added at Signing Servers Software Assurance 20 26.13$ 522.60$ 9EA-00278 Win Server DC Core ALng SA 2L D Added at Signing Servers Software Assurance 140 139.19$ 19,486.60$ 9EA-00279 Win Server DC Core ALng SASU 2L Win Server Std D Added at Signing Servers SA Step Up 484 274.16$ 132,693.44$ 9EM-00270 Win Server Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 506 21.37$ 10,813.22$ Year Three Subscriptions Total:533,526.00$ Three Year Subscriptions Total:1,600,578.00$ Three Year Combined Total:2,356,936.08$ Confidential.EA At Signing Thank you for the opportunity to quote. 11/13/2025 Page 4 of 5 City of Palo Alto Quotation:1125-PaloAlto-Budgetary-Renewal-V5-MSEA-FA Subscription Start Date:2/1/2026 November 6, 2025 Subscription End Date:1/31/2029 68000857 ITARC-00930 Year One:12 Months 12 Part Number Item Name Level Purchase Period Pool Product Type Quantity Term Price Extended Price Enterprise Products - Lead AAD-34700 M365 G3 Unified FSA Renewal GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1100 $328.82 361,702.00$ AAD-34704 M365 G3 Unified FUSL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 225 $386.81 87,032.25$ AAL-45735 M365 G5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $612.45 3,062.25$ Additional Products - Commercial Azure AAA-35418 Azure Monetary Commitment Provision D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $0.00 -$ Additional Products - Lead J5U-00004 AzureprepaymentG ShrdSvr ALNG SubsVL MVL Commit Provision D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $0.00 -$ 3GU-00001 Defender O365 P1 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 30 $18.32 549.60$ 3NS-00003 Exchange Online P2 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 150 $73.02 10,953.00$ PEY-00002 GitHub Enterprise Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 15 $191.82 2,877.30$ EP2-24658 M365 Copilot GCC Sub Add-on D Non-Specific Applications Monthly Subscriptions-VolumeLicense 25 $366.30 9,157.50$ 3EB-00001 M365 F1 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $23.44 2,344.00$ M9T-00002 O365 Extra File Storage GCC Sub Add-on Extra Storage 1 GB D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5000 $2.20 11,000.00$ 7E7-00001 Planner & Project P3 FSA GCC Renewal Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $232.97 23,297.00$ 7VX-00001 Planner & Project P5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $502.32 1,004.64$ 1O5-00001 Power Automate Premium GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $161.17 322.34$ HJR-00002 Power BI Premium EM1 GCC Sub D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $5,708.18 5,708.18$ 6U1-00004 Power BI Premium USL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 6 $200.98 1,205.88$ DDJ-00001 Power BI Pro GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 39 $100.37 3,914.43$ NYH-00001 Teams AC with Dial Out US/CA GCC Sub Add-on D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1325 $0.00 -$ LM9-00001 Teams Domestic Calling Plan GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $128.94 257.88$ VA1-00001 Teams Rooms Pro GCC Sub Per Device D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $429.79 2,148.95$ 9K4-00003 Visio P2 FSA GCC Renewal Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 60 $116.48 6,988.80$ 12 Month Total:533,526.00$ Enterprise Products - Lead AAD-34700 M365 G3 Unified FSA Renewal GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1100 $328.82 361,702.00$ AAD-34704 M365 G3 Unified FUSL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 225 $386.81 87,032.25$ AAL-45735 M365 G5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $612.45 3,062.25$ Additional Products - Commercial Azure AAA-35418 Azure Monetary Commitment Provision D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $0.00 -$ Additional Products - Lead J5U-00004 AzureprepaymentG ShrdSvr ALNG SubsVL MVL Commit Provision D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $0.00 -$ 3GU-00001 Defender O365 P1 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 30 $18.32 549.60$ 3NS-00003 Exchange Online P2 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 150 $73.02 10,953.00$ PEY-00002 GitHub Enterprise Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 15 $191.82 2,877.30$ EP2-24658 M365 Copilot GCC Sub Add-on D Non-Specific Applications Monthly Subscriptions-VolumeLicense 25 $366.30 9,157.50$ 3EB-00001 M365 F1 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $23.44 2,344.00$ M9T-00002 O365 Extra File Storage GCC Sub Add-on Extra Storage 1 GB D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5000 $2.20 11,000.00$ 7E7-00001 Planner & Project P3 FSA GCC Renewal Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $232.97 23,297.00$ 7VX-00001 Planner & Project P5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $502.32 1,004.64$ 1O5-00001 Power Automate Premium GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $161.17 322.34$ HJR-00002 Power BI Premium EM1 GCC Sub D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $5,708.18 5,708.18$ 6U1-00004 Power BI Premium USL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 6 $200.98 1,205.88$ DDJ-00001 Power BI Pro GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 39 $100.37 3,914.43$ NYH-00001 Teams AC with Dial Out US/CA GCC Sub Add-on D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1325 $0.00 -$ LM9-00001 Teams Domestic Calling Plan GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $128.94 257.88$ VA1-00001 Teams Rooms Pro GCC Sub Per Device D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $429.79 2,148.95$ 9K4-00003 Visio P2 FSA GCC Renewal Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 60 $116.48 6,988.80$ 12 Month Total:533,526.00$ Confidential.EA Monthly Subscriptions Thank you for the opportunity to quote. 11/13/2025 Page 5 of 5Enterprise Products - Lead AAD-34700 M365 G3 Unified FSA Renewal GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1100 $328.82 361,702.00$ AAD-34704 M365 G3 Unified FUSL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 225 $386.81 87,032.25$ AAL-45735 M365 G5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $612.45 3,062.25$ Additional Products - Commercial Azure AAA-35418 Azure Monetary Commitment Provision D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $0.00 -$ Additional Products - Lead J5U-00004 AzureprepaymentG ShrdSvr ALNG SubsVL MVL Commit Provision D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $0.00 -$ 3GU-00001 Defender O365 P1 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 30 $18.32 549.60$ 3NS-00003 Exchange Online P2 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 150 $73.02 10,953.00$ PEY-00002 GitHub Enterprise Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 15 $191.82 2,877.30$ EP2-24658 M365 Copilot GCC Sub Add-on D Non-Specific Applications Monthly Subscriptions-VolumeLicense 25 $366.30 9,157.50$ 3EB-00001 M365 F1 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $23.44 2,344.00$ M9T-00002 O365 Extra File Storage GCC Sub Add-on Extra Storage 1 GB D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5000 $2.20 11,000.00$ 7E7-00001 Planner & Project P3 FSA GCC Renewal Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $232.97 23,297.00$ 7VX-00001 Planner & Project P5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $502.32 1,004.64$ 1O5-00001 Power Automate Premium GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $161.17 322.34$ HJR-00002 Power BI Premium EM1 GCC Sub D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $5,708.18 5,708.18$ 6U1-00004 Power BI Premium USL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 6 $200.98 1,205.88$ DDJ-00001 Power BI Pro GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 39 $100.37 3,914.43$ NYH-00001 Teams AC with Dial Out US/CA GCC Sub Add-on D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1325 $0.00 -$ LM9-00001 Teams Domestic Calling Plan GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $128.94 257.88$ VA1-00001 Teams Rooms Pro GCC Sub Per Device D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $429.79 2,148.95$ 9K4-00003 Visio P2 FSA GCC Renewal Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 60 $116.48 6,988.80$ 12 Month Total:533,526.00$ 36 Month Total:1,600,578.00$ Confidential.EA Monthly Subscriptions Thank you for the opportunity to quote.