Microsoft Beats Amazon For $10B Pentagon JEDI Contract

So much for the idea that the JEDI program was set up for Amazon.

The U.S. Department of Defense has picked Microsoft to build a cloud storage system for the military under a 10-year, fixed-price contract that could be worth up to $10 billion.

The decision comes after a bidding process that has been dogged by controversy, with Oracle, which was eliminated from contending, filing an ultimately fruitless court challenge, alleging that the contract had been tailored for Amazon.

Amazon Web Services had been considered the favorite to win the contract due to its cloud work for the CIA and its commanding share of the cloud services market.

The Joint Enterprise Defense Infrastructure program is meant to replace the U.S. military’s poorly integrated, aged computer networks and clouds with a single cloud system that would encompass all networked assets, from soldiers on the ground to all of its combat aircraft and naval vessels.

The win could add $10 in value to Microsoft shares, Wedbush analyst Daniel Ives said in a client note, and is an indicator of Microsoft’s healthy chances in its competition with Amazon for the $1 trillion in cloud services spending the research firm expects over the next decade. “This is a game changer deal for Microsoft to win as this will have a ripple effect for the company's cloud business for years to come,” he wrote.

An Amazon spokesman declined to address whether the company would protest the award. “We’re surprised about this conclusion,” he said. “AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion.”

Since the contract is being awarded in segments, Amazon isn’t out of the game, says Daniel Gouré, a vice president at the Lexington Institute, a Washington, D.C., defense think tank. “The Pentagon could go with a second source down the road once they're comfortable.”

In early August, the Department of Defense said it was holding up the award for review by the newly confirmed Secretary of Defense, Mark Esper, weeks after President Trump had publicly expressed concern over complaints by competitors that the bid was rigged for Amazon. Trump’s interest in the contract raised eyebrows given his frequent attacks on Amazon CEO Jeff Bezos, who also owns The Washington Post.

Some critics had warned that it could be a security risk to have a single cloud provider for all branches of the military as well as the CIA.

In late August, Microsoft was one of the winners of a lower-profile defense cloud contract: the Defense Enterprise Office Solutions program, or DEOS. The DoD and the General Services Administration awarded the $7.6 billion contract to a team led by General Dynamics to provide word processing and spreadsheets, email and file sharing through Microsoft Office 365 products hosted on its Azure cloud.

After a protest by the losing bidder, the GSA said earlier this month that it would revise the contract, but both the contenders’ bids were based on Office 365.

“Instead of Amazon being the huge 10,000-pound gorilla at the Pentagon, maybe it'll be Microsoft,” says Gouré.

IBM and Oracle were eliminated from bidding for JEDI in April by the DoD, which judged they were unable to meet its Impact Level 6 security requirements for the military’s most sensitive data. Google dropped out of the running last year after months of protests by employees who wanted the company to stop doing defense work.

It’s possible that Microsoft could meet with similar opposition from its workers after the surprise JEDI victory. In February, a group of Microsoft employees called for the company to drop an $840 million contract to adapt HoloLens augmented reality technology for use by the U.S. Army.

Source: Jeremy Bogaisky
https://www.forbes.com
You can also get big contracts as the JEDI one, start up business in Mexico!
If you would like to find out more about this topic or are interested in receiving a complimentary business case analysis for your operation in Mexico, please fill out this form or contact us at:

US toll-free: +1 (877) 698 3905

CAN toll-free: +1 (844) 422 4922

start@americanindustriesgroup.com
Please note that we do not accept job applications here. If you are interested in applying for a position, please visit the following link: https://www.americanindustriesgroup.com/jobs/




Related posts

November 28, 2022
Global Manufacturing Tumbles but Mexico Remains Strong
Global Manufacturing Tumbles but Mexico Remains Strong
Global manufacturing activities have not recovered from the impact of the COVID-19 pandemic and following disruptions, contracting for the third consecutive month in September 2022. The […]
November 24, 2022
Nidec Control Techniques expands Into Mexico
Nidec Control Techniques expands Into Mexico
Control Techniques and Nidec entered the next phase of its expansion plans for global manufacturing. On Wednesday 12th October a brand-new manufacturing facility was opened in […]
November 23, 2022
Mexico increases vehicle production and exports
Mexico increases vehicle production and exports
Carmakers based in Mexico increased production and exports in October this year as supply chain constraints eased, according to the Mexican Automotive Industry Association (Amia). Mexico […]
October 20, 2022
Chinese investment in manufacturing on the rise in Mexico
Chinese investment in manufacturing on the rise in Mexico
Chinese investment in Mexico continues to grow as more and more companies from the world’s most populous nation seek to take advantage of the country’s proximity […]
October 20, 2022
BRP will produce the first electric motorcycles in Mexico
BRP will produce the first electric motorcycles in Mexico
BRP laid the first stone of its new plant for the production of latest-generation electric Can-AM motorcycles and electric batteries, with an investment of more than […]
September 30, 2022
J.P. Morgan ups Mexican economic growth forecast on manufacturing boost
J.P. Morgan ups Mexican economic growth forecast on manufacturing boost
MEXICO CITY, Sept 27 (Reuters) – J.P. Morgan analysts raised their economic growth forecast for Mexico’s third quarter gross domestic product (GDP), as well as for […]