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Microsoft has won the $10 billion Pentagon cloud computing contract, known as JEDI, over Amazon which was quite surprising.
Recently, on Friday, the U.S. Department of Defense (DOD) made it clear that they had chosen Microsoft over Amazon in their $10 billion cloud computing contract, also known as JEDI. With this contract, the Department of Defense will move its database to the cloud.
However, this has left Amazon Web Services wondering as they were considered as leaders in the field, and the most likely winner of this contract.
“We’re surprised about this conclusion. AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly leads to a different conclusion. 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,” commented an AWS spokesperson.
Additionally, the contract itself is also known as JEDI or Joint Enterprise Defense Infrastructure, which is a 10-year long contract which anticipates that the Department of Defense database will be moved to the cloud and making Pentagon more modern and digital.
As expected, talks of a fair competition were in the air as Oracle and IBM also ran for the contract. They got eliminated from the process in April 2019. After the elimination, Oracle launched a lawsuit against the Department of Defense, alleging that the selection process is “riddled with improprieties”, but failed massively.
“All were treated fairly and evaluated consistently with the solicitation’s stated evaluation criteria. Prior to the award, the department conferred with the DOD Inspector General, which informed the decision to proceed,” reads the Pentagon statement which announced Microsoft as the winner.
However, what Amazon can do, regards this DOD choice, is they could possibly protest against the decision through a “request for reconsideration” with the Government Accountability Office.
Some experts point out that they fully expect Amazon to do this through a court.
After the announcement, as expected, Microsoft shares went up 2,5% to $144.35 while Amazon shares went down by not so much but still 0,98% to $1,744.
AWS or Amazon Web Services is a cloud market leader, and recently posted a $2.3 billion increase in sales growth over the past quarter. Also, AWS is responsible for nearly 72% of Amazon’s total operating income over the third-quarter earnings report.