Of interest will be how the company, if it does obtain the contract, satisfies the requirement of Australian law which stipulates that all census data must remain within the country's borders.
Microsoft gained Protected cloud status from the Australian Signals Directorate in April for its Office 365 and Azure services. Questions were raised about the certification after the ASD issued a consumer guide containing a number of fiats about the services.
At that time, there were exceptions made for the company's staff outside Australia to administer any system holding Australian data, but not to actually access the data. Whether such an exemption will be made this time as well remains to be seen.
The 2016 census was run by IBM which satisfied the requirement to hold data locally by having its local arm run the show. The census that year ended in a fiasco when the website for submitting data went down on the night of the count.
The site was taken offline on 9 August 2016 at about 7.30pm, with claims that a distributed denial of service was to blame. No proof has ever been offered to back up this claim.
The sources said that it was unclear whether Microsoft would try to run the whole census on its own or whether it would provide the cloud services and do it in collaboration with some other technology firm.
The Redmond giant is part of the group that will be involved in the next US census in 2020; the contract has been won by Hortonworks and, apart from Microsoft providing cloud services, Amazon and IBM will be involved too.
In the event that Microsoft does win the contract, it will mark a further step for the company into offering Federal Government services, apart from product sales.
It is set to provide cloud services for the trial of the Federal Government's Govpass ID solution this month, after the Digital Transformation Agency, the government agency that will oversee implementation of the ID solution, announced in August that it had adopted the company's Azure service as its cloud solution.
The 2016 census ultimately turned messy for IBM and ended up with accusations flying back forth between the company and its partners, Nextgen and Vocus Communications, of having been responsible for the stuff-up. IBM paid a fine for the mess-up, but the quantum is unknown.
iTWire contacted Microsoft for comment on Wednesday. The company has not yet responded.