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Pentagon awards $ 10 billion deal to Microsoft's cloud military for Amazon



The Pentagon awarded Microsoft a $ 10 billion cloud computing agreement, snooping on an early Amazon CEO whose competitive bid drew criticism from President Trump and his business competitors. Bidding on a huge project known as Joint Enterprise Defense Infrastructure, or JEDI, pits leading technology titans Microsoft, Amazon, Oracle, and IBM against each other.

A spokesman for Amazon Web Services told CBS News that the company was "surprised" by the decision.

"AWS is the clear leader in cloud computing and detailed evaluation, clean and comparatively available, clearly leads to a different conclusion. We remain deeply committed to continuing to innovate in the new digital battlefield where security, efficiency, sustainability and scalability of resources there can be a difference between success and failure, "the spokesman says.

The giant contract attracted more attention than most, prompted by speculation early in the process that Amazon would be the sole winner of the deal. Tech giants Oracle and IBM have backed out of their bids and also formally protested the bidding process last year.

Later, Oracle challenged the process in federal court, but lost.

Mr. In July, Trump jumped into the fight, saying the administration would "look at the process for a very long time," saying he had heard complaints. Mr. Trump often expresses his anger at Amazon and founder Jeff Bezos, who also owns the Washington Post. At the time, he said other companies told him the contract "was not at a competitive price."

Defense Secretary Mark Esper withdrew from a controversial bidding process earlier this week, citing conflicts of interest. because his son works for one

The JEDI system will store and process vast amounts of classified data, allowing the US military to use artificial intelligence to accelerate its military planning and combat capabilities.

A cloud strategy document discovered by the Department of Defense last year called for the replacement of military "unbundled and stove pipe information systems" with a commercial cloud service "that will enable data fighters and is essential to maintain of the technological advantage of our military. "

The Pentagon emphasized in a message that the process is fair and complies with the procurement guidelines. He noted that over the past two years, it has awarded more than $ 1

1 billion in ten separate cloud computing contracts, and said the JEDI award "continues our multi-cloud multi-cloud strategy."

The latter came up with a statement intended to respond to previous criticism of the outsourcing of such a large deal to a company.

The deal is a major profit for Microsoft Azure's cloud business, which has long been catching up with Amazon's market-leading Amazon Web Services. Microsoft said it was preparing a statement.

According to a July report from research firm Gartner, Amazon holds almost 48% of the public cloud computing market, followed by Microsoft in second place with nearly 16%.

In the last year, Microsoft has positioned itself as a friend of the US Army. President Brad Smith wrote last fall that Microsoft has long been supplying technology to the military and will continue to do so despite employee discounts.

Oracle and IBM were eliminated earlier in the process, leaving Microsoft and Amazon to fight it.

Google decided last year not to compete for the contract, saying it would run counter to the principles of AI ethics. Google employees have a special voice in protest of the company's involvement with government contracts.

"It's a paradigm shift for Microsoft to win JEDI," says Dan Ives, managing director of Wedbush Securities. "And this is a huge black eye for Amazon and Bezos."

Microsoft, Amazon, Google and other tech giants have been criticized by their own employees for dealing with the government, especially with regard to military and immigration projects.


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