Microsoft tops Amazon for $10 billion defense contract

Joanna Estrada
February 22, 2020

"We look forward to expanding our longstanding partnership with DoD and support our men and women in uniform at home, abroad, and at the tactical edge with our latest unique and differentiated Azure cloud capabilities". We are proud that we are an integral partner in DoD's overall mission cloud strategy.

The JEDI award "continues our strategy of a multi-vendor, multi-cloud environment", it added. "Prior to the award, the department conferred with the DOD Inspector General, which informed the decision to proceed", it said in a statement.

The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract is part of a broader digital modernization of the Pentagon meant to make it more technologically agile.

Constellation Research Inc. analyst Holger Mueller noted that it's the largest contract and workload in Azure's history.

Initially, Amazon was seen as the probable victor because its AWS business won a deal with the Central Intelligence Agency in 2013 and because the firm had been certified at the highest existing security clearance level.

Amazon's retail business in North America fetched $1.28 billion in operating income, while its global retail business bled, reporting an operating loss of $386 million.

"We're surprised about this conclusion", an AWS spokesperson said in a statement. "We remain deeply committed to continuing to innovate for the new digital battlefield where security, efficiency, resiliency, and scalability of resources can be the difference between success and failure".

AWS is considering options for protesting the award, a person familiar with the matter told Reuters. It could protest the decision through what's known as a "request for reconsideration" with the Government Accountability Office. While that contract is now under protest, whoever wins will be delivering Microsoft 365 email and applications to the DOD. "The base contract period is two years with a $1 million guarantee", Deasy added in the announcement". The contract is set to cover 10 years, with an estimated $10 billion in spending. Marco Rubio, R-Fla., urged the Pentagon in July to consider multiple vendors for its cloud computing services. "Additional contracting opportunities are anticipated".

Defense Secretary Mark Esper recused himself from the controversial bidding process earlier this week, citing a conflict of interest because his son works for one of the companies that originally bid. After all, Microsoft is a more focused company and Amazon is now targeting nearly anything and everything where it thinks it can make a buck or displace other businesses. There has been, and undoubtedly will be more, speculation that President Trump influenced the decision through public comments about it in recent months. Trump has always been critical of Amazon and its founder and CEO, Jeff Bezos.

Amazon was considered the front-runner until President Donald Trump began his criticisms of Jeff Bezos, the founder of Amazon and, for the past several years, the owner of The Washington Post - a news organization the president refers to as the "Amazon Washington Post", the Times reported.

Other reports by Click Lancashire

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