Microsoft's Pentagon win a game-changer, at a cost

Amazon had always been considered a front-runner for the Joint Enterprise Defense Infrastructure, or JEDI.

Trump has always been at odds with Amazon chief executive officer Jeff Bezos, who own the Washington Post, which Trump claims has treated him unfairly in its coverage.

Oracle has been involved in a pending court case against the DoD since last December, alleging that a former Oracle employee who worked on the bidding process, had a conflict of interest as they now work with AWS.

It was against this backdrop that Trump announced in July - just as the Pentagon was reportedly prepared to announce a decision on the JEDI contract - that he was looking "very seriously" at intervening in the contracting process because unnamed people had told him "it wasn't competitively bid". Referring to Trump, one source said at the time, "He's obsessed with Amazon".

Through JEDI, the Pentagon is aiming to unify cloud services and connect data sharing between multiple branches of the military.

The JEDI system will store and process vast amounts of classified data, allowing the U.S. military to use artificial intelligence to speed up its war planning and fighting capabilities.

The Pentagon emphasized in an announcement that the process was fair and followed procurement guidelines.

At first, the Big 'Soft, IBM, Oracle, Google, and Amazon were all in the running for the $10B contract, which is not only the biggest internet technology contract in military history but also a foot in the door for the billions of dollars in federal spending on cloud computing expected over the next few years.

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The latter statement appeared created to address previous criticism about awarding such a large deal to one company. For example, Microsoft employees openly objected to the company's close relations with the military, fearing that the company's Hololens technology could be used for military training and weaponry.

Amazon Web Services does the same thing for the Central Intelligence Agency and seemed to have the inside track.

"We're surprised about this conclusion", Amazon spokesperson Drew Herdener stated.

Amazon showed complete surprise by the Pentagon's decision, stating that a "detailed assessment on the comparative offerings" would "clearly lead to a different conclusion". "We remain deeply committed to continuing to innovate for the new digital battlefield". Amazon accounts for about 48% of the cloud computing market, versus Microsoft's 17%, according to a report from analysts Gartner, and has higher security clearances for government work.

Over the previous year, Microsoft has positioned itself as a friend of the United States military.

Oracle and IBM were eliminated earlier in the process, leaving Microsoft and Amazon to battle it out at the end. Google employees have been especially vocal in protesting the company's involvement with government contracts.

"This is a paradigm changer for Microsoft", Los Angeles-based Wedbush Securities Inc analyst Daniel Ives said. It's a shocker to Amazon and Bezos to lose it.

JEDI is one of Pentagon's most ambitious projects.

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