Microsoft Can Still Declare Victory in Pentagon's Cloud Deal
The Defense Department’s decision to reopen its high-profile cloud-computing contract puts Microsoft’s Azure on par with market leader Amazon. That says something.
Even though Microsoft lost out as sole winner of a high-profile Pentagon cloud contract, it’s still in the game.
Photographer: Rich Clement/Bloomberg
After years of partisan and legal infighting, the U.S. Pentagon gave Amazon.com Inc. a big victory on Tuesday by reopening its blockbuster cloud-computing contract. Assuming the decision doesn’t get appealed in the courts, it could be a good result for the government. Even Microsoft Corp., the original sole winner of the initial deal, may be able to declare victory.
The Defense Department said it is abandoning the $10 billion Joint Enterprise Defense Infrastructure or so-called JEDI deal that it awarded to Microsoft in 2019, and which was immediately disputed in court by Amazon. The government explained the move by saying its technology requirements had changed during the years the contract was mired in litigation. It now plans to seek proposals for a multi-vendor deal from a handful of companies that can fulfill its needs, specifically naming Amazon and Microsoft. The government also said it would consider bids from other companies such as Oracle Corp., International Business Machines Corp. and Alphabet Inc.’s Google if they can meet the conditions, but signaled only Amazon and Microsoft had the capabilities it required.