The US Department of Defense announced on October 25 that they are awarding its controversial $10 billion cloud computing business to Microsoft, a decision that surprised Amazon. It's a big win for Microsoft over Amazon, which is a long-time frontrunner for the Joint Enterprise Defense Infrastructure (JEDI) cloud contract that will shift the Pentagon’s computing infrastructure and data to the cloud. It was announced after an intense lobbying effort and a lawsuit filed by some of America's biggest tech companies who have accused the military of supporting Amazon in a process that has dragged on for more than a year. At that time, Trump and other administrative officials opposed and made it clear that the contract should not go to Amazon. According to federal acquisition laws, politicians including President are not allowed to influence contract awards.
Amazon developed its lucrative cloud computing business for more than 10 years ago and currently obtains a market share of 48 percent, according to a market research firm. Microsoft is the second largest with a 15.5 percent share. The cloud computing contract, JEDI is the military's largest information technology contract award in history and is expected to lead to other businesses across the federal government. The competitors and industry analysts had expected Amazon to lead and win the contract due to its years of experience dealing with highly confidential data for the CIA. The military also gave the company its highest data management certification.
Some of them thought that Microsoft would win over Amazon for the massive contract but the President's role in the process will become a subject of litigation. While announcing the award the Defense Department said that the bidding process was conducted following applicable laws and regulations. The statement said that all the parties were treated equally without any favoritism and evaluated consistently. Amazon's spokesperson Drew Herdener said that they are completely surprised. He added that AWS is the leader in cloud computing. On the other hand, Microsoft spokesperson Frank Shaw declined the comment and said that the positive approach is the one that leverages the innovations of different cloud service providers.