Trump Admin Pulls Rug From Under Amazon, Rewards $10 Billion Contract Microsoft

Yolanda Curtis
April 1, 2020

It was definitely considered early on because of AWS' previous contract with the Central Intelligence Agency back in 2013, and Amazon being certified at the highest existing security clearance level, while Microsoft has been playing catch up.

"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", the DOD noted in a statement Friday after the announcement., the market leader in cloud services, is considering a challenge to the award of the contract to Microsoft's much smaller Azure business, citing President Donald Trump's interference in the bidding process, according to a person familiar with the matter.

"Losing the bid is also a hit to the reputation of Amazon, which decided past year to open a large outpost in Northern Virginia that will eventually employ at least 25,000 people", the New York Times reported on Friday.

Amazon CEO Jeff Bezos has been also steadily increasing his presence and influence in the area in the years prior, buying the Washington Post in 2013 and buying a home in Washington, DC, in 2016.

The contract: The intention is to update the Defense Department's technology stack, replacing its complex, decades-old computer networks with one single cloud computing system.

But don't think the DoD failed to consider Amazon and AWS.

Amazon's Amazon Web Services now holds about 32% of the cloud computing market, while Microsoft's Azure has about 18%, according to research firm Canalys. "AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion", the company said in a statement on Saturday.

"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", the company spokesperson added.

Microsoft, which doesn't break out comparable sales for its Azure unit, likely pulled in a fraction of that, analysts say. There's an anecdote in the book that alleges Trump called Mattis last summer and directed him to "screw Amazon" out of the JEDI contract. Mattis didn't do what Trump asked, Snodgrass wrote. The company did not respond to requests for comment on its next steps. "The process cleared review by" the U.S. General Accounting Office and the Court of Federal Claims.

"So I'm getting tremendous complaints about the contract with the Pentagon and with Amazon".

The Defense Department is investing in commercial cloud services, which host computing power and storage in remote data centers, to improve data security and speed real-time sharing of information across the military. "We brought our best efforts to the rigorous JEDI evaluation process and appreciate that DoD has chosen Microsoft...we are proud that we are an integral partner in DoD's overall mission cloud strategy". Microsoft's stock rose by 3% on Friday evening as a result.

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