Microsoft wins $10.000 billion contract to upgrade Defense Department computer systems
Who will be in charge of modernizing the computer systems of the United States Department of Defense will be Microsoft, a decision that has been a surprise.
Cloud computing is a highly competitive and multi-million dollar market segment. More than a year ago, the joint Department of Business Defense (JEDI) issued a contract to upgrade its systems. This contract has as a prize no less than 10 000 million dollars. A really brutal figure that big tech companies like Microsoft or Amazon opted for.
The contract was being disputed by IBM, Oracle, Microsoft and Amazon. Google was also competing for this contract, but in October 2018 it exited the race without submitting a firm offer. According to Google, they came out of the bid due to conflicts with their business principles. The best located was Amazon, but in the end it was a surprise.
Microsoft wins a Defense contract worth 10 billion dollars
Although Amazon is the leader in the cloud computing market, it was Microsoft who won the contract. Both companies were the best positioned, but Amazon was ahead. Daniel Ives, an analyst at Wedbush Securities, says that Amazon has a 45% market dominance, while Microsoft has a 25% dominance.
Finally, it has been Microsoft who has won the Defense contract. Your task will be to update the Pentagon's systems over the next ten years. Today's systems date back to the 80s and 90s, so they are brutally outdated. So much so that Defense has spent billions of dollars over the years getting them to communicate and operate.
Amazon was the big favorite to win this contract. About a year ago, Trump, the President of the United States, began a campaign of attacks against Bezos. Among other reasons for the attacks is that Bezos owns The Washington Post. Trump often accuses this outlet of publishing 'fake news', since they go against his interests and dismantle his infamous lies.
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Trump commented that other "big companies" should have the opportunity to compete. Former Secretary of Defense Jim Mattis assures that Trump would have tried to influence Microsoft. Mark Sper, current Secretary of Defense, says this topic is radioactive. I claim that I needed time (months) to make a decision on the tender. A few days ago, she decided to hold back on this because her son works at IBM.
Subsequently, there was a lot of talk about the possibility of Microsoft taking part of the contract. It was even commented that the contract would be divided among several of the most important suppliers.
"The acquisition process was carried out in accordance with the applicable laws and regulations," says the statement from the Department of Defense. "All bidders were treated fairly"
Meanwhile Amazon is surprised by the decision: “AWS (Amazon Web Service) is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly led to a different conclusion. " Drew Herdener, a spokesman for Amazon, said.
The experts argue that the President's intervention would be totally inappropriate. There are factors that indicate possible manipulation by Trump. The situation could arise that the decision is appealed to court.
Source: NYT
