Microsoft or Amazon for DoD contract

Sorry Oracle, It’s Microsoft or Amazon for the DoD’s $10B Cloud Contract

In Cloud by Shelly KramerLeave a Comment

Microsoft or Amazon for DoD contract

A federal judge ruled today on a challenge by Oracle in its quest for the $10B cloud computing contract for the US Department of Defense. Oracle claimed that the DoD’s procurement process violated federal laws around competitive processes and was marred by conflicts of interest. Read more at Financial Times.

It’s Microsoft or Amazon for the DoD’s $10bn Cloud Contract

Analyst Take: Oracle’s complaints as it relates to the award of the DoD’s $10B Joint Enterprise Defense Infrastructure (JEDI) cloud computing contract were many. Oracle didn’t like the bidding process, nor did it agree with the DoD’s decision to ultimately award the contract designed to take the agency full on into the cloud to a single provider rather than spreading the work out among a variety of partners.

The company complained about Amazon’s hiring of two former Defense Department employees involved in the procurement process. In short, they made a lot of noise.

Note that IBM was eliminated alongside Oracle in April of this year, as the Pentagon narrowed its finalists to two: Microsoft and Amazon. IBM didn’t put up a fight—at least not publicly, although it had to be a disappointment for the company not to be selected.

Why Microsoft Will Be Selected

I believe the ultimate decision here will swing to Microsoft for a few reasons—the first and foremost of which is trust and familiarity. Microsoft is without dispute a market leader. Whether Azure, Windows, Office 365, or a myriad of the company’s other offerings, Microsoft is globally trusted and relied upon and, more importantly, is already heavily in use and entrenched throughout government operations.

In addition, the Azure Government Secret, which affords top-level security clearance and Defense Information Systems Agency’s Impact Level 6 (IL-6) workloads, levels the playing field between AWS and Azure, nullifying any competitive advantage that AWS might have had going in.

Finally, we can’t overlook the fact that Amazon’s AWS cloud offering has one significant disadvantage: It’s Amazon. It’s no secret that the current administration is no fan of Amazon’s CEO Jeff Bezos, and the company, along with Google, and Facebook, and other tech giants are coming under increased scrutiny these days by the feds on a variety of fronts, largely related to monopolistic control they have in far too many arenas as well as the power they collectively wield.

For these reasons, it makes no sense that the government would hand over a ten-year, $10B cloud services contract to Amazon.

Time will tell on this front, but my money is on Microsoft. And Oracle? There’s plenty of other business out there, move along.

Note that after the announcement of the decision today, Oracle’s shares were down 1 percent to $59.40, while Amazon’s shares were up .054 percent to $2,011.82 and Microsoft shares rose .25 percent to $138.74.

Image credit: Stephen Lawson and Network World

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The original version of this article was first published on Futurum Research.

Shelly Kramer is a Principal Analyst and Founding Partner at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation. She brings 20 years' experience as a brand strategist to her work at Futurum, and has deep experience helping global companies with marketing challenges, GTM strategies, messaging development, and driving strategy and digital transformation for B2B brands across multiple verticals. Shelly's coverage areas include Collaboration/CX/SaaS, platforms, ESG, and Cybersecurity, as well as topics and trends related to the Future of Work, the transformation of the workplace and how people and technology are driving that transformation. A transplanted New Yorker, she has learned to love life in the Midwest, and has firsthand experience that some of the most innovative minds and most successful companies in the world also happen to live in “flyover country.”

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