Microsoft Loses Exclusive Pentagon Cloud Contract

The Department of Defense (DoD) will cancel a $10 billion cloud computing contract that was awarded to Microsoft over Amazon during the Trump administration.

Instead of the canned Joint Enterprise Defense Infrastructure (JEDI) contract, the Pentagon will now be seeking solicitations from multiple cloud service providers, including both Microsoft and Amazon, for a new Joint Warfighting Cloud Capability contract.

Had the JEDI contract gone forward, Microsoft would have been responsible for building a cloud storage system for military data and tech for the Department. The project was set to generate up to $10 billion in revenue over a ten-year period.

When the contract was awarded to Microsoft back in 2019, many in the cloud computing industry were surprised. Amazon is regarded as the industry leader and was the odds on favorite to win.

Amazon Strikes Back

Amazon wasn’t content to stand by, filing a suit with the US Court of Federal Claims to contest the decision. It argued that the awarding of the contract was politically motivated by former President Trump’s personal conflict with then Amazon CEO Jeff Bezos.

A year later, in 2020, the Department announced it would reevaluate its decision before finally announcing in 2021 that it would cancel the contract.

By way of explanation, the Department said that “due to evolving requirements, increased cloud conservancy, and industry advances,” the JEDI contract no longer meets its needs.

Microsoft and Amazon weren’t as neutral in their responses to the decision. Microsoft said it understands the Department’s decision, going on to imply it was a neater alternative to continuing with “what could be a years long litigation battle.”

Amazon released a statement approving of the decision but reiterated that it was still concerned by the factors that were alleged to influence the awarding of the JEDI contract.