Microsoft Routs Amazon For $10 Billion JEDI Contract with the Pentagon
The U.S. Department of Defense has picked Microsoft to build a cloud storage system for the military under a 10-year, fixed-price contract that could be worth up to $10 billion.
The decision comes after a bidding process that has been dogged by controversy, with Oracle, which was eliminated from contending, filing an ultimately fruitless court challenge, alleging that the contract had been tailored for Amazon.
The Joint Enterprise Defense Infrastructure program is meant to replace the U.S. military’s poorly integrated, aged computer networks and clouds with a single cloud system that would encompass all networked assets, from soldiers on the ground to all of its combat aircraft and naval vessels.
The win could add $10 in value to Microsoft shares, Wedbush analyst Daniel Ives said in a client note, and is an indicator of Microsoft’s healthy chances in its competition with Amazon for the $1 trillion in cloud services spending the research firm expects over the next decade. “This is a game changer deal for Microsoft to win as this will have a ripple effect for the company's cloud business for years to come,” he wrote.