Amazon, Google, Microsoft, Oracle get $9 billion Pentagon cloud deals

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The Pentagon Building in Washington, DC

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The Pentagon said Wednesday that Amazon, Google, Microsoft and Oracle each was awarded a cloud computing contract that could reach up to $9 billion each through 2028.

The result of the Joint Warfighting Cloud Capability, or JWCC, effort is consistent with the U.S. Department of Defense’s efforts to rely on multiple providers of remotely operated infrastructure technology, rather than relying on a single company, a strategy which was promoted during the Trump administration.

An increasing number of companies have also tried to rely on more than one cloud provider. In some cases, they rely on specialized capabilities on one and most front-end and back-end workloads on the other. At other times they come in costs. Having more than one cloud can give organizations more confidence that they can withstand service interruptions due to outages.

Originally, the Pentagon had promised the Joint Enterprise Defense Infrastructure, or JEDI, to Microsoft in 2019. A legal battle ensued when Amazon, the top player in the cloud infrastructure market, challenged the Pentagon’s decision.

In 2020, the Pentagon watchdog conducted a review and reigned that there was no evidence to conclude that the Trump administration had intervened in the contract award process. Months later the Pentagon announced it would stay with Microsoft for the JEDI deal.

Last year the Pentagon changed its approach, ask for offers from Amazon, Google, Microsoft and Oracle to meet cloud needs. But the General Services Administration stated at the time that only Amazon and Microsoft seemed able to meet the Pentagon’s demands.

Wednesday’s result is especially a boon for Oracle, which analysts don’t see in the top tier of companies offering cloud-based computing services. Oracle generated $900 million in cloud infrastructure revenue in the quarter ended Aug. 31, a small fraction of the A total of $20.5 billion for Amazon’s cloud subsidiary, Amazon Web Services, in the third quarter.

All four tech companies have won indefinite supply, indefinite quantity, or IDIQ contracts, meaning they can source an indefinite amount of services for a set period of time.

The purpose of this contract is to provide the Department of Defense with enterprise-wide, globally available cloud services for all security domains and classification levels, from the strategic to the tactical level.

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