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Amazon Cites Bias in Winning Microsoft's Cloud War Contract



Jeff Bezos speaking at the New York Economic Club New York Lunch on October 27, 2016.

Adam Jeffrey | CNBC

Amazon said Thursday it has filed a notice with the US Federal Court of Claims, outlining a plan to protest the Pentagon's decision to provide Microsoft with a contentious contract for cloud services.

The Pentagon said Microsoft won a contract, which could last 10 years and cost up to $ 1

0 billion, on October 25th. He was originally scheduled to be assigned last year. The Wall Street Journal reported on Amazon's protest plans earlier Thursday.

The contract represents a huge profit for Microsoft under CEO Satya Nadella, which has made cloud services a higher priority. For Amazon, it would be smaller; its Amazon Web Services division had revenue of $ 9 billion in the last quarter.

"The numerous aspects of the JEDI evaluation process contained clear flaws, errors and infallible biases – and it is important that these issues be addressed and corrected," Amazon told CNBC in an email.

A Pentagon official said he would not speculate on potential litigation. Microsoft did not immediately respond to requests for comment.

In August, the Pentagon announced that Esper would review the JEDI deal after President Donald Trump said he had received complaints from companies about the process. In July, Trump said that companies were reporting that contract specifications were in favor of Amazon, according to Bloomberg.

Read more: Trump says he's looking for a contract in the Pentagon cloud

"I've never had anything more people complain about," Trump said last month at the White House. the largest companies in the world are complaining about this, "he added, naming Microsoft, Oracle and IBM.

The lucrative contract originally scheduled to be awarded in September 2018 was postponed until Secretary of Defense Mark Esper a series of extensive technology reviews.

"We have to get this right so we won't We will take the time that the evaluation team has to spend to make sure they choose the best technical solution at the right price with the right criteria, "Dana Deacie, the Pentagon's chief information officer, told reporters in a roundtable closed-door press table in the pentagon.

"We have no entrepreneurial approach," Add Disy. "We have a bunch of solutions created. We have a lot of vendors that we use for cloud solutions, but we've never backed down and created a complete solution, and that's challenging in that area." [19659002] Microsoft does not specify how much revenue comes from Azure, but a 59% growth rate in the third quarter is above 35% AWS growth rate.

– CNBC's Ilan Mui contributed to this report.

WATCH: President Trump: We will look closely at Amazon's contract with the Pentagon


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