Why Microsoft (Not Amazon) Could Win The Pentagon Contract

Beth Kindig

Summary

The majority of forecasts favor Amazon for the Pentagon contract while overlooking the partnerships that MS has made with the DoD since Nadella became CEO in 2014.

By the first quarter of 2019, Azure Government Secret will support "Secret U.S. classified data or Defense Information Systems Agency (DISA) level 6" which is on par with Amazon.

The question that remains is if the Pentagon will want to use Amazon for cloud infrastructure while using Microsoft for operating systems and software.

In 2019, the biggest cloud customer in the world will be the United States Department of Defense. The DoD is currently reviewing bids to award a single cloud provider a multi-year contract. Obviously, this isn't your typical enterprise IT department, transferring from on-premise servers, or a startup who needs the flexibility of cloud infrastructure to scale. The program is called the Joint Enterprise Defense Initiative, or JEDI, and its purpose is to move the DoD's massive computing systems into the cloud. This one contract is worth $10 billion, or 25% of the current market, which currently stands at $40 billion in annual revenue.

Many prognosticators and reporters unanimously believe the contract will go to Amazon Web Services. This belief is so strong that vendors, such as Oracle and IBM, made a rebuttal to Congress, believing the terms of the proposal favored Amazon. However, the majority of these forecasts overlook Microsoft's strength in security and IT, and the alliances Microsoft has been forming with the DoD since Satya Nadella became CEO in 2014. Admittedly, guessing a company other than Amazon will win the Pentagon contract is a pure gamble, however, there are strong indicators for Microsoft that should not be overlooked.

Background on JEDI Contract

The Pentagon contract will move 3.4 million users and 4 million devices off private servers and into the cloud. The security risks of using servers outside the Pentagon's domain are offset by physically separated government regions and hybrid solutions that extend on-premise servers by adding the cloud where necessary. The benefits of artificial intelligence, deep learning, and other technologies like virtual reality are essential for modern warfare as real-time data will inform missions when soldiers are in the field and also help to prepare them for combat.

https://seekingalpha.com/article/4231824-microsoft-amazon-win-pentagon-contract