by The Pentagon Building in Washington, DC
Staff | AFP | Getty Images
This was announced by the Pentagon on Wednesday Amazon, Google, Microsoft and oracle Each received a cloud computing contract that can reach up to $9 billion each by 2028.
The outcome of the Joint Warfighting Cloud Capability (JWCC) effort is consistent with the US Department of Defense’s effort to rely on multiple vendors for remote infrastructure technology rather than relying on a single company, a strategy employed during the Trump administration was encouraged.
More and more companies have also tried to rely on more than one cloud provider. In some cases, they rely on specialized skills on one and the majority of front-end and back-end workloads on another. At other times they accrue to the cost. Having more than one cloud can give organizations more confidence that they can withstand service disruptions due to outages.
Originally, the Pentagon awarded 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. Oracle also challenged the Pentagon’s choice.
In 2020, the Pentagon watchdog conducted a review and ruled that there was no evidence the Trump administration interfered in the contracting process. Months later, the Pentagon announced that it would stick with Microsoft on the JEDI deal.
Last year, the Pentagon changed its approach, soliciting bids 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 requirements.
Wednesday’s earnings are a boon for Oracle in particular, which analysts don’t see among the top tier of companies offering cloud-based computing services. Oracle generated $900 million in cloud infrastructure revenue for the quarter ended Aug. 31, a small fraction of the $20.5 billion that Amazon’s cloud subsidiary Amazon Web Services generated in the third quarter overall.
All four tech companies have contracts for unlimited supply, unlimited quantity, or IDIQ, meaning they can include an unlimited amount of services for a period of time.
“The purpose of this contract is to provide the Department of Defense with enterprise-wide, globally available cloud services across all security domains and tiers of classification, from the strategic layer to the tactical edge,” the Department of Defense said.
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