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Microsoft beats Amazon for Pentagon's $10 bln cloud computing contract

Video Credit: Reuters Studio
Published on October 26, 2019 - Duration: 01:47s

Microsoft beats Amazon for Pentagon's $10 bln cloud computing contract

Microsoft has won the Pentagon's $10 billion cloud computing contract, the Defense Department said on Friday, beating out favorite Amazon.

Mia Womersley reports

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Microsoft beats Amazon for Pentagon's $10 bln cloud computing contract

Microsoft has won the Pentagon's $10 billion cloud computing contract.

And beaten out favorite Amazon.

The U.S. Defense Department made the announcement on Friday (October 25).

The contracting process had long been mired in conflict of interest allegations.

And had even drawn the attention of President Donald Trump - who has publicly taken swipes at Amazon and its founder Jeff Bezos.

The Joint Enterprise Defense Infrastructure Cloud contract - or JEDI as it is known - is part of a broader digital modernization of the Pentagon.

The idea is to make it more technologically agile.

And specifically to give the military better access to data and the cloud from battlefields and other remote locations.

Although the Pentagon boasts the world's most potent fighting force, many officials say its information technology is woefully inadequate.

Tech giant and fellow bidder Oracle had expressed concerns about the award process for the contract... Including the role of a former Amazon employee who worked on the project at the Defense Department but recused himself.

Then later left the Defense Department and returned to Amazon Web Services.

Other companies were concerned a single award would give the winner an unfair advantage in follow-on work.

The Pentagon has said it planned to award future cloud deals to multiple contractors.

After the announcement was made, a statement from the Amazon Web Services spokesman said the company was "surprised about this conclusion." And that a "detailed assessment purely on the comparative offerings" would "clearly lead to a different conclusion".

A person familiar with the matter told Reuters Amazon is considering protesting the award.

Microsoft shares were up 3% in after-hours trading after the news.

Amazon shares were down 0.92%.

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