Pentagon cancels $ 10 billion JEDI cloud computing contract
The move also comes days after Andy Jassy, ââthe former head of Amazon’s cloud business, took over from Amazon founder Jeff Bezos as chief executive. Mr. Jassy’s appointment highlighted the importance of cloud computing for large technology companies, which have built giant data centers all over the world to accommodate new commercial and government customers.
The 10-year JEDI contract was awarded to Microsoft in 2019 after a fight between Amazon and other tech giants over the deal to modernize the military’s cloud computing systems. Much of the military operates on outdated computer systems, and the Department of Defense has spent billions of dollars trying to modernize those systems while protecting classified material.
Although some companies, including enterprise software company Oracle, lobbied for the Pentagon to break the contract to pieces and award it to multiple vendors, the Defense Department continued with plans to use a single vendor. of cloud, believing that this would be the most transparent and the most secure approach.
Due to the size and security requirements of the JEDI contract, Amazon was widely seen as the leader. When the price fell to Microsoft, Amazon took legal action to block the contract, arguing that Microsoft lacked the technical capabilities to meet the military’s needs and that the process had been skewed against Amazon because of the Mr. Trump’s repeated criticism of Mr. Bezos, who also owns the Washington Post.
âFor Microsoft, this has gone from a lottery deal to a legal nightmare,â said Daniel Ives, general manager of equity research at Wedbush Securities. Microsoft said Amazon’s allegations of bias lacked evidence and was ready to provide the necessary technology to the military, while the Defense Department said Mr. Trump played no role in decision.
The Washington Post has aggressively covered the Trump administration, and Mr. Trump has often referred to the newspaper as the “Amazon Washington Post” and accused it of spreading “fake news.” He also said companies other than Amazon should be considered for the JEDI contract, and Amazon argued that it had used “inappropriate pressure” to influence the Pentagon by selecting a technology supplier.
In April, a federal court said it could not rule out the possibility that Mr. Trump had interfered in the process. The court ruling cleared the way for the Pentagon, which had argued that significant delays surrounding the contract had caused national security concerns, to withdraw from the contract.