Like the Death Star on Endor, JEDI created a ton of fallout and stormy weather in cloud market

Winners and losers speak out after $10bn contract award

Late on Friday, word broke that the US Department of Defense had decided to award the massive 10-year, $10bn Joint Enterprise Defense Initiative contract to Microsoft.

Coming at the tail end of the Friday news dump period, the decision caught everyone a bit off guard. Now, having had a weekend to digest the news, where do things stand for Microsoft, AWS, and the rest of the cloud compute space?

What they had to say

Microsoft, understandably, was over the moon about a win that will send its Azure platform surging into a government market that had been dominated by AWS. The Redmond giant told The Register in a statement that it was more than ready to begin.

"For over 40 years, Microsoft has delivered innovative, proven and secure technologies to the US Department of Defense (DoD). We brought our best efforts to the rigorous JEDI evaluation process and appreciate that DoD has chosen Microsoft. We are proud that we are an integral partner in DoD’s overall mission cloud strategy," said Toni Townes-Whitley, president of Microsoft's US Regulated Industries division.

"As was articulated throughout the JEDI procurement, the DoD has a singular objective - to deploy the most innovative and secure commercially available technology to satisfy the urgent and critical needs of today’s warfighters. We look forward to expanding our longstanding partnership with DoD and support our men and women in uniform at home, abroad, and at the tactical edge with our latest unique and differentiated Azure cloud capabilities."

At the other end was AWS, the other finalist and presumptive favorite to win the deal. The Amazon-owned cloud outfit was understandably upset and a bit shocked that it wasn't on the winning end.

"We’re surprised about this conclusion. AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion," AWS told El Reg in a statement.

"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."

What does it mean?

As AWS alluded in its statement, the JEDI bidding and award process was dogged from the start by outside politics and accusations. Almost from the beginning, AWS was hit with complaints that it was improperly influencing the Pentagon's decision making process in an effort to get its thumb on the scale.

While a series of failed legal challenges looked to have cleared the way for AWS, things took a turn when the White House, with its long-standing grudge against Amazon founder and media mogul Jeff Bezos, stepped into the fray.

Rob Enderle, principal analyst with the Enderle Group and a veteran industry pundit, says that the President's intervention muddies up what would be an otherwise shining victory for Microsoft and Azure.


Pentagon beams down $10bn JEDI contract to Microsoft: Windows giant beats off Bezos


"I don’t think this really looks good for Amazon or Microsoft because Amazon appears to be done with new government contracts and Microsoft’s win is overshadowed by the appearance of abuse of power," Enderle told The Register.

"Still, a win is a win and this is a huge one which should further push Azure as the favorite of the US Government and with Gates again passing Bezos as the world’s richest man it also showcases Nadella’s strategy of staying close to his firm’s competencies as the better one long term."

In the end, Microsoft walks away with the victory, but nobody really looks good.

Then there were the also-rans, like IBM and Oracle, who were out of the running for the contract long-ago, but maintained an interest in the deal. Particularly Oracle, who spearheaded the charge against the JEDI decision-making by arguing that AWS had improperly influenced Pentagon staffers with job offers.

One would think that seeing the target of its ire miss out on the $10bn mega-deal would be a win for Big Red, but as Enderle notes, Oracle can't be much happier to see another competitor in Azure get the win.

"Larry Ellison isn’t exactly a Microsoft fan either," the analyst points out, "so Microsoft winning this likely has Ellison thinking he needs to remind staff that execution is important and I sure wouldn’t want to be that staff." ®

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