Microsoft won the contract to supply the US department of defense with cloud service for the next ten years. The announcement on the $ 10 billion contract saw Microsoft’s stock rise by 3%, whereas Amazon’s shares fell by 1%. Besides, the contract will have a ripple effect on other Microsoft cloud business in future. Several cloud service providers like Amazon, IBM, and Oracle sought the contract dubbed “JEDI”.
The Joint Enterprise Defense Infrastructure (JEDI) deal means more to Microsoft that it does to Amazon, owing to its alleged smaller market share. According to Pentagon, the DoD seeks to deploy the most innovative and secure commercially available technology to satisfy its war-fighters’ needs.
Microsoft believes that it deserves the contract, owing to Azure’s innovative and proven secure technologies which it previously delivered to the DoD.
“For over 40 years, Microsoft has delivered innovative, proven and secure technologies to the US Department of Defense. We brought our best efforts and appreciate that DoD has chosen Microsoft,” A spokesperson told CNBC.
Nevertheless, analysts predict that Amazon might challenge Pentagon’s decision in court, owing to their previous track record. Amazon won a business deal with CIA in 2013, and holds the highest existing security clearance sought by Microsoft. Furthermore, the company expressed their disappointment in the decision, pledging their commitment to innovations for the digital battlefield.
“We’re surprised about this conclusion,” an Amazon spokesperson told CNBC. “AWS is the leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion. 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.”
