Microsoft beats Amazon to $10bn Pentagon cloud contract

Department of Defense hails ‘important step’ in modernisation of systems

Credit: David B. Gleason/CC BY-SA 2.0

Microsoft has beaten Amazon Web Services to secure a potential $10bn deal to modernise the computing infrastructure of the US Department of Defense and move it to a cloud environment.

The Joint Enterprise Defense Infrastructure deal – or Jedi – has been in the works for two years, since the Pentagon first went to market seeking bids. 

The process has been dogged by controversy and two of the four bidders for the deal – IBM and Oracle – both lodged official complaints with US regulators concerning the government’s plan to award the contract to just one vendor. Neither complaint was upheld, and both companies were ruled out earlier in the bidding process.

With Google having declined to bid in the first place – on account of the contract contravening the company’s principles regarding its use of artificial intelligence – AWS and Microsoft were left as the only two bidders.

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Amazon was widely considered the firm favourite to land the deal – although this status was cast into some doubt by comments made in July by president Donald Trump, who said he had received “tremendous complaints” regarding a possible contract between the cloud firm and the Pentagon.

Such complaints are now moot, with Microsoft surprising many onlookers by swiping the deal – which could last up to 10 years.

In addition to migrating DoD systems to a cloud environment, it will host sensitive data and use AI tools to offer greater analysis of information.

“The Department of Defense has taken another step forward in the implementation of our Cloud Strategy with the award of an enterprise general-purpose cloud contract to Microsoft,” the Pentagon said. “This continues our strategy of a multi-vendor, multi-cloud environment, as the department’s needs are diverse and cannot be met by any single supplier. This contract will address critical and urgent unmet warfighter requirements for modern cloud infrastructure at all three classification levels delivered out to the tactical edge.

“This award is the conclusion of a process that began with the release of the first RFI to industry nearly two years ago. Throughout that time, the department’s focus never wavered from the need to support our warfighters with this essential capability.”

The department said that each of the four bidders “were treated fairly and evaluated consistently”. It added that the procurement “was conducted in accordance with applicable laws and regulations”.


Sam Trendall

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