Dell Technologies shares moved higher in Wednesday’s extended trading after the Pentagon awarded Dell Federal Systems a five-year, $9.7 billion deal to manage Microsoft software licensing across the Defense Department, intelligence community and U.S. Coast Guard.

Officials said the agreement is designed to consolidate licenses for Microsoft tools used for email, spreadsheets and other services on both classified and unclassified networks, according to Bloomberg.

Pentagon CIO Kirsten Davies said Dell beat multiple rivals for the contract and estimated the arrangement would cut annual costs by $422 million.

Bloomberg reported that Acting Navy CIO Barry Tanner said the contract gives the military one centralized source for the licenses needed to operate Microsoft systems, reducing duplication.

He said the goal was to combine existing purchases and capture efficiencies.

Dell stock was up 4% in premarket trading.

Over the past month, Dell has gained about 44.9% versus a 5.2% rise in the S&P 500 and is up roughly 142% year-to-date compared to the index’s 9.4% gain. The stock is trading after-hours above its 52-week high of $312.14.

Historically, Dell has navigated significant shifts in technology, from its early dominance in personal computers to its current focus on enterprise solutions, reflecting broader industry trends towards digital transformation and data-centric services.