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The US Department of Defense’s (DoD’s) bid to create a $10bn general purpose cloud environment, based on single supplier’s technology, has been wall-to-wall controversy from start to finish.
As soon as the Joint Enterprise Defense Infrastructure (JEDI) contract was first announced in September 2017, eyebrows were raised in response to its projected value, the fact the DoD said it would be in place for 10 years, and that it would need just one provider to fulfil its requirements.
Once the great and good of the tech supplier community got full sight of the DoD’s full RFP for the contract, both Oracle and IBM went public with their concerns the document had been written with a supplier already in mind to meet its brief: Amazon Web Services (AWS).
As the procurement process played out and became increasingly protracted as a result of Oracle’s concerns being addressed by the US federal court, there was a pervading feeling amongst market watchers that AWS would end up securing the contract eventually anyway.
That was right up until Friday 25 October, when the DoD announced it was Microsoft who it would be entrusting with building the cloud environment that would form the cornerstone of the Department’s decade-long IT modernisation and streamlining plans. And not AWS.
The decision came as a shock to some, not least of all AWS and its spokespeople: “We’re surprised by this conclusion,” a company representative told Computer Weekly via a statement. “AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion.”
A conclusion that would see Amazon triumph, if it were not for other factors coming into play.
Outside influencers at work?
While the AWS statement makes no explicit reference this, there is a feeling the outcome to the procurement process may have played out differently, if it was not for some apparent outside interference during its later stages by US President Donald Trump.
“I’m sure Microsoft will do a fine job, but had the playing field been level I suspect that the outcome would have been different,” John Dinsdale, chief analyst and research director at market watcher Synergy Research Group, told Computer Weekly. “This is a prime example of bad stuff happening when you mix politics, personalities and business.”
To recap, in July 2019 the US press reported comments made by President Trump that he had received complaints about the JEDI contract from IBM, Oracle and Microsoft that he claimed warranted further investigation by the Pentagon.
The following month, US Defence Secretary Mark Esper confirmed he would be placing JEDI under review, and that no decisions about who would secure the contract would be forthcoming until that process was complete. At this point, Amazon and Microsoft were known to be the last two suppliers left in the running for the contract.
Details have also emerged in recent days about an alleged phone call that is said to have taken place in 2018 between former US Defence Secretary James Mattis and Trump, during which the president is alleged to have ordered him to “screw Amazon” out of bidding for the JEDI contract.
That is according to the account of a former speechwriter of Mattis’s, Guy Snodgrass, in his soon-to-be published book, Holding the line: Inside Trump’s Pentagon with Secretary Mattis.
According to US news site CNBC, the request was turned down, and assurances made that the procurement would be carried out “by the book, both legally and ethically”.
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Even so, speculation persists that Trump’s intervention may have had some bearing on how the contract award process for the JEDI contract has panned out.
So much so, US Senator Angus King asked Pentagon CIO Dana Deasy to “categorically assure” attendees of an Armed Services Committee meeting on 29 October that Trump and White House had no say on who the contract was awarded to.
“Mr. Trump’s antipathy to Amazon is well-known. It’s been reported that he, even in the summer of 2018, he instructed General Mattis to, quote, “Screw Amazon” out of the opportunity to bid on this JEDI contract and there are many other statements about Amazon and [its CEO] Jeff Bezos,” said King, during his question addressed to Deasy.
“Can you categorically assure us that there was no influence by the White House or the President on the ultimate disposition of this contract? And I want you to think hard about that answer.”
In response, Deasy said he felt “very confident” that the people tasked with deciding who the JEDI contract should be awarded to were not influenced by external players in anyway during the process.
“The way we organised the team [and] kept the anonymity of the team… [means] that I feel very confident that at no time were team members that actually took the source selection were influenced with any external [factors], including the White House,” said Deasy.
Coming to a decision
And it was their view, following a period of probing by Deasy over why they came to their decision, that the JEDI contract should go to Microsoft.
The Redmond software giant does have a long-standing supplier relationship in place with the DoD as well, going back more than 40 years, which may have weighted the JEDI decision in its favour.
“We brought our best efforts to the rigorous JEDI evaluation process and appreciate that DoD has chosen Microsoft,” said Toni Townes-Whitley, president of US regulated industries at Microsoft, in a statement to Computer Weekly.
“As was articulated throughout the JEDI procurement, the DoD has a singular objective - to deploy the most innovative and secure commercially available technology to satisfy the urgent and critical needs of today’s warfighters.
“We look forward to expanding our longstanding partnership with DoD and support our men and women in uniform at home, abroad, and at the tactical edge with our latest unique and differentiated Azure cloud capabilities.”
And, while Amazon has expressed skepticism that, if the decision was based purely on the technical merits of their respective cloud platforms, it still would have gone Microsoft’s way, that is not a point of view shared by everyone.
Expanding cloud portfolio capabilities
Chris Smith, vice-president of cloud architecture at US-based cloud management software consultancy Unitas Global, said Microsoft has gone to great lengths – particularly over the course of the past year – to expand the capabilities of its cloud portfolio.
This in turn means DoD could stand to benefit from having access to a much broader portfolio of services and capabilities than Amazon is willing to give the firm credit for.
"The JEDI cloud contract is a significant step forward for the DoD in migrating to next-generation technologies in order to gain the security, reliability, and efficiency needed to operate,” said Smith.
“The selection of Microsoft's Azure cloud platform is a stand-out in terms of AI technology and [as is] the company’s increased focus on partnerships with other organisations over the past year to give customers access to a collaborative platform with a wider base of services and capabilities.
“The JEDI contract will propel Microsoft to the forefront of the cloud wars by allowing them to invest, innovate and execute on their continually growing public cloud environment," added Smith.
Amazon to go on the offensive?
At the time of writing, it is unclear if Amazon is planning to act on its “surprise” at the DoD’s decision by taking legal action or lodging an appeal with the US Government Accountability Office, and the company has declined to comment further on what its next steps will be.
At the moment, AWS is by far and away the biggest public cloud firm, with Synergy Research Group’s own data showing it has a market share of 40%, whereas Microsoft is in second place (ahead of Google and Alibaba) with 19%.
“As the market continues to grow by 40% per year, Amazon’s share remains at around the 40% mark, while Microsoft, Google and Alibaba are all slowly gaining ground. That being said, the three of them combined remain some way behind Amazon,” said Dinsdale.
For Microsoft, though, the DoD contract could go someway to closing the gap between it and AWS, in market share terms, as it could potentially lead to new business opportunities opening up elsewhere for the firm, continued Dinsdale.
“It would be a big feather in the cap,” he said. “It can be a great reference contract that the winner can point to in order to help win similar government/defense-type business elsewhere.”
This might be justification enough for Amazon to contest the DoD’s decision, delaying the departments’ digital transformation plans even further, given the contract winner was initially on course to be announced in September 2018.
For now, it is all eyes on Amazon to see what it does next in response, but it is fair to assume that Microsoft securing the JEDI contract will be far from the end of this story.
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