Microsoft Beats Amazon for Pentagon's $10 Billion Cloud Computing Contract

An Amazon Web Services (AWS) spokesman said the company was "surprised about this conclusion."

Advertisement
By Reuters | Updated: 26 October 2019 10:16 IST
Highlights
  • JEDI contract is a part of Pentagon's broader digital modernisation
  • AWS is considering options for protesting the award
  • Oracle had expressed concerns about the award process in the past

Microsoft shares were up three percent to $144.98 in after-hours trading after the news

Microsoft has won the Pentagon's $10 billion (roughly Rs. 70,840 crores) cloud computing contract, the US Defense Department said on Friday, beating out favourite Amazon.com. The contracting process had long been mired in conflict of interest allegations, even drawing the attention of US President Donald Trump, who has publicly taken swipes at Amazon and its founder Jeff Bezos. Trump in August said his administration was reviewing Amazon's bid after complaints from other companies.

The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract is part of a broader digital modernisation of the Pentagon meant to make it more technologically agile. Specifically, a goal of JEDI is to give the military better access to data and the cloud from battlefields and other remote locations.

Advertisement

Oracle had expressed concerns about the award process for the contract, including the role of a former Amazon employee who worked on the project at the Defense Department but recused himself, then later left the Defense Department and returned to Amazon Web Services.

In a statement, an Amazon Web Services (AWS) spokesman said the company was "surprised about this conclusion."

Advertisement

The company said that a "detailed assessment purely on the comparative offerings" would "clearly lead to a different conclusion," according to the statement.

AWS is considering options for protesting the award, a person familiar with the matter told Reuters.

Advertisement

Although the Pentagon boasts the world's most potent fighting force, its information technology remains woefully inadequate, according to many officials.

Officials have complained of having outdated computer systems and being unable to access files or share information as quickly as they might be able to in the private sector.

Advertisement

"If I am a warfighter, I want as much data as you could possibly give me," Lieutenant General Jack Shanahan, the director of the Joint Artificial Intelligence Center, told reporters in August describing the importance of the contract.

Some companies were concerned that a single award would give the winner an unfair advantage in follow-on work. The Pentagon has said it planned to award future cloud deals to multiple contractors.

This week, US Defense Secretary Mark Esper removed himself from reviewing the deal due to his adult son's employment with one of the original contract applicants, IBM. IBM had previously bid for the contract but had already been eliminated from the competition.

Microsoft said it was working on a comment. IBM and Oracle did not immediately return requests for comment.

In a book slated for publication October 29, retired Navy commander Guy Snodgrass, who served as a speech writer to former Defense Secretary Jim Mattis, said Trump called Mattis and directed him to "screw Amazon" by preventing it from bidding on the JEDI contract, according to an excerpt of the book seen by Reuters ahead of its release.

"We're not going to do that," Mattis later told other Pentagon officials, according to the excerpt. "This will be done by the book, both legally and ethically."

Snodgrass declined to comment pending the release of his book.

In a statement announcing Microsoft as the winner, the Pentagon underscored its view that the competition was conducted fairly and legally.

"All (offers) 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," it said.

Microsoft shares were up three percent to $144.98 (roughly Rs. 10,200) in after-hours trading after the news. Amazon shares were down 0.92 percent to $1,745.12 (roughly Rs. 1,23,600).

The Pentagon said it had awarded more than $11 billion across 10 separate cloud contracts over the past two years.

"As we continue to execute the DOD Cloud Strategy, additional contracts are planned for both cloud services and complementary migration and integration solutions necessary to achieve effective cloud adoption," the Pentagon said.

© Thomson Reuters 2019

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Advertisement

Related Stories

Popular Mobile Brands
  1. Oppo Watch S2 Will Launch With These New Health Tracking Features
  2. Redmi Note 17 Pro Series With Up to 10,000mAh Battery Debuts in India
  3. Oracle Cuts More Jobs as AI Data Centre Spending Rises
  4. OnePlus N6 Lite Will Launch in India on This Date: See Features
  5. iPhone Air vs iPhone 17 Trade-In Value: US and India Compared
  6. Google's Motion Assist Feature Expands to More Devices
  7. Samsung Galaxy S27 Ultra Tipped to Feature M16 OLED Panels
  1. OnePlus N6 Lite India Launch Date Announced; Key Specifications, Features Revealed
  2. Redmi Note 17 Pro Max, Note 17 Pro Launched in India With Up to 10,000mAh Battery, 50-Megapixel Camera: Price, Features
  3. Google’s Motion Assist Expands to More Android Phones: How to Enable the Motion Sickness Feature
  4. iPhone Air Trade-In Value Matches Cheaper iPhone 17 in US, Despite Higher Launch Price
  5. Oracle Layoffs Reportedly Begin as Company Ramps Up AI Infrastructure Investments
  6. Samsung Galaxy Tab S12 Series Will Reportedly Launch Early Next Month: Expected Specifications
  7. Samsung Galaxy S27 Ultra Tipped to Feature M16 OLED Panels; May Prioritise Privacy Over Brightness
  8. Anthropic Says Claude Assisted Cyberattacks and Military Weapons Development
  9. iPhone 18 Pro and iPhone 18 Pro Max Delivery Dates Slip to October in India, US After Preorders Begin
  10. Oppo F35, Oppo F35 Pro Design, Colour Options Reportedly Leak Ahead of India Launch
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.