The Pentagon has named two finalists of the JEDI contract winners. (Image Credit: Ivan Cholakov via Getty Images)
Two finalists in the $10 billion dollar, decade-long, JEDI cloud contract were announced on Wednesday by the Pentagon and Oracle was not named as a finalist. Despite lawsuits, protests and complaints to the president, Microsoft and Amazon have been named finalists. The contract aims to bring cloud computing to the defense department.
One of the main reasons the contract caught the attention of companies who support cloud computing was not only for the large sum of money, but also because it's a winner-take-all proposition. However, it's also worthy to note that whichever company wins the contract may not see all the $10 billion involved and it may not even last for 10 years because there are certain points in the contract where the department could drop out. Meanwhile, some participants had been bothered by the contract over the year.
Google was in the running as well, but backed out, while both IBM and Oracle had been making complaints about it favoring Amazon. Some companies even raised questions about using a single-vendor approach. Ultimately, $10 billion really isn't that much in the cloud computing business, but there is much more involved here than money. The winner could have a higher and better chance of acquiring other government contracts. Since developing the cloud for the Department of Defense and preparing it for computing in a highly secure way could lead to much bigger contracts with equivalent requirements.
Both Amazon and Microsoft are ideal winners since they are the most qualified to meet requirements. They are the top cloud infrastructure vendors on the market even though Microsoft is trailing behind with only 13-14 percent of market share, while Amazon is ahead with 33 percent.
Microsoft brings many tools and resources to the table that could potentially win over the Pentagon. Azure Stack, a mini, more private version of Azure that you can use anywhere has great appeal to the Pentagon, especially when it can be useful for military purposes. Although both companies have experience with government contracts and both have their pros and cons, it will be a tough decision to choose a winner based on what they offer.
Contract issues took another turn in February when investigations regarding a conflict of interest were ongoing by an ex-employee of Amazon who was involved in the process for some time before going back to the company. There have been no conflicts to be reported, but it's possible there are ethical violations at play here, which have been referred to the Department of Defense.
The winner was supposed to be announced later this month, but ongoing issues have yet to be resolved while new ones keep arising and the winner will be announced in July.
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