Dec
12
2018
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Oracle is suing the US government over $10B Pentagon JEDI cloud contract process

Oracle filed suit in federal court last week alleging yet again that the decade-long $10 billion Pentagon JEDI contract with its single-vendor award is unfair and illegal. The complaint, which has been sealed at Oracle’s request, is available in the public record with redactions.

If all of this sounds familiar, it’s because it’s the same argument the company used when it filed a similar complaint with the Government Accountability Office (GAO) last August. The GAO ruled against Oracle last month stating, “…the Defense Department’s decision to pursue a single-award approach to obtain these cloud services is consistent with applicable statutes (and regulations) because the agency reasonably determined that a single-award approach is in the government’s best interests for various reasons, including national security concerns, as the statute allows.”

That hasn’t stopped Oracle from trying one more time, this time filing suit in the United States Court of Federal Claims this week, alleging pretty much the same thing it did with the GAO, that the process was unfair and violated federal procurement law.

Oracle Senior Vice President Ken Glueck reiterated this point in a statement to TechCrunch. “The technology industry is innovating around next generation cloud at an unprecedented pace and JEDI as currently envisioned virtually assures DoD will be locked into legacy cloud for a decade or more. The single-award approach is contrary to well established procurement requirements and is out of sync with industry’s multi-cloud strategy, which promotes constant competition, fosters rapid innovation and lowers prices,” he said, echoing the language in the complaint.

The JEDI contract process is about determining the cloud strategy for the Department of Defense for the next decade, but it’s important to point out that even though it is framed as a 10-year contract, it has been designed with several opt-out points for DOD with an initial two-year option, two three-year options and a final two-year option, leaving open the possibility it might never go the full 10 years.

Oracle has complained for months that it believes the contract has been written to favor the industry leader, Amazon Web Services. Company co-CEO Safra Catz even complained directly to the president in April, before the RFP process even started. IBM filed a similar protest in October, citing many of the same arguments. Oracle’s federal court complaint filing cites the IBM complaint and language from other bidders including, Google (which has since withdrawn from the process) and Microsoft that supports their point that a multi-vendor solution would make more sense.

The Department of Justice, which represents the U.S. government in the complaint, declined to comment.

The DOD also indicated it wouldn’t comment on pending litigation, but in September spokesperson Heather Babb told TechCrunch that the contract RFP was not written to favor any vendor in advance. “The JEDI Cloud final RFP reflects the unique and critical needs of DOD, employing the best practices of competitive pricing and security. No vendors have been pre-selected,” she said at the time.

That hasn’t stopped Oracle from continually complaining about the process to whomever would listen. This time they have literally made a federal case out of it. The lawsuit is only the latest move by the company. It’s worth pointing out that the RFP process closed in October and a winner won’t be chosen until April. In other words, they appear to be assuming they will lose before the vendor selection process is even completed.

Nov
14
2018
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Government denies Oracle’s protest of $10B Pentagon JEDI cloud RFP

When Oracle filed a protest in August with the Government Accountability Office (GAO) that the Pentagon’s $10 billion JEDI RFP process was unfair, it probably had little chance of succeeding. Today, the GAO turned away the protest.

The JEDI contract has been set up as a winner-take-all affair. With $10 billion on the table, there has been much teeth-gnashing and complaining that the deck has been stacked to favor one vendor, Amazon. The Pentagon has firmly denied this, but it hasn’t stopped Oracle and IBM from complaining loudly from the get-go that there were problems with the way the RFP was set up.

At least with the Oracle complaint, the GAO put that idea firmly to rest today. For starters, the GAO made it clear that the winner-take-all approach was just fine, stating “…the Defense Department’s decision to pursue a single-award approach to obtain these cloud services is consistent with applicable statutes (and regulations) because the agency reasonably determined that a single-award approach is in the government’s best interests for various reasons, including national security concerns, as the statute allows.”

The statement went on to say that the GAO didn’t find that the Pentagon favored any vendor during the RFP period. “GAO’s decision also concludes that the Defense Department provided reasonable support for all of the solicitation provisions that Oracle contended exceeded the agency’s needs.” Finally, the GAO found no evidence of conflict of interest on the DOD’s part as Oracle had suggested.

Oracle has been unhappy since the start of this process, going so far as having co-CEO Safra Catz steer her complaints directly to the president in a meeting last April long before the RFP period had even opened.

As I wrote in an article in September, Oracle was not the only vendor to believe that Amazon was the favorite:

The belief amongst the various other players, is that Amazon is in the driver’s seat for this bid, possibly because they delivered a $600 million cloud contract for the government in 2013, standing up a private cloud for the CIA. It was a big deal back in the day on a couple of levels. First of all, it was the first large-scale example of an intelligence agency using a public cloud provider. And of course the amount of money was pretty impressive for the time, not $10 billion impressive, but a nice contract.

Regardless, the RFP submission period ended last month. The Pentagon is expected to choose the vendor in April 2019, Oracle’s protest notwithstanding.

Oct
26
2018
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Microsoft has no problem taking the $10B JEDI cloud contract if it wins

The Pentagon’s $10 billion JEDI cloud contract bidding process has drawn a lot of attention. Earlier this month, Google withdrew, claiming ethical considerations. Amazon’s Jeff Bezos responded in an interview at Wired25 that he thinks that it’s a mistake for big tech companies to turn their back on the U.S. military. Microsoft president Brad Smith agrees.

In a blog post today, he made clear that Microsoft intends to be a bidder in government/military contracts, even if some Microsoft employees have a problem with it. While acknowledging the ethical considerations of today’s most advanced technologies like artificial intelligence, and the ways they could be abused, he explicitly stated that Microsoft will continue to work with the government and the military.

“First, we believe in the strong defense of the United States and we want the people who defend it to have access to the nation’s best technology, including from Microsoft,” Smith wrote in the blog post.

To that end, the company wants to win that JEDI cloud contract, something it has acknowledged from the start, even while criticizing the winner-take-all nature of the deal. In the blog post, Smith cited the JEDI contract as an example of the company’s desire to work closely with the U.S. government.

“Recently Microsoft bid on an important defense project. It’s the DOD’s Joint Enterprise Defense Infrastructure cloud project – or “JEDI” – which will re-engineer the Defense Department’s end-to-end IT infrastructure, from the Pentagon to field-level support of the country’s servicemen and women. The contract has not been awarded but it’s an example of the kind of work we are committed to doing,” he wrote.

He went on, much like Bezos, to wrap his company’s philosophy in patriotic rhetoric, rather than about winning lucrative contracts. “We want the people of this country and especially the people who serve this country to know that we at Microsoft have their backs. They will have access to the best technology that we create,” Smith wrote.

Microsoft president Brad Smith. Photo: Riccardo Savi/Getty Images

Throughout the piece, Smith continued to walk a fine line between patriotic duty to support the U.S. military, while carefully conceding that there will be different opinions in a large and diverse company population (some of whom aren’t U.S. citizens). Ultimately, he believes that it’s critical that tech companies be included in the conversation when the government uses advanced technologies.

“But we can’t expect these new developments to be addressed wisely if the people in the tech sector who know the most about technology withdraw from the conversation,” Smith wrote.

Like Bezos, he made it clear that the company leadership is going to continue to pursue contracts like JEDI, whether it’s out of a sense of duty or economic practicality or a little of both — whether employees agree or not.

Oct
15
2018
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Jeff Bezos is just fine taking the Pentagon’s $10B JEDI cloud contract

Some tech companies might have a problem taking money from the Department of Defense, but Amazon isn’t one of them, as CEO Jeff Bezos made clear today at the Wired25 conference. Just last week, Google pulled out of the running for the Pentagon’s $10 billion, 10-year JEDI cloud contract, but Bezos suggested that he was happy to take the government’s money.

Bezos has been surprisingly quiet about the contract up until now, but his company has certainly attracted plenty of attention from the companies competing for the JEDI deal. Just last week IBM filed a formal protest with the Government Accountability Office claiming that the contract was stacked in favor one vendor. And while it didn’t name it directly, the clear implication was that company was the one owned by Bezos.

Last summer Oracle also filed a protest and also complained that they believed the government had set up the contract to favor Amazon, a charge spokesperson Heather Babb denied. “The JEDI Cloud final RFP reflects the unique and critical needs of DOD, employing the best practices of competitive pricing and security. No vendors have been pre-selected,” she said last month.

While competitors are clearly worried about Amazon, which has a substantial lead in the cloud infrastructure market, the company itself has kept quiet on the deal until now. Bezos set his company’s support in patriotic terms and one of leadership.

“Sometimes one of the jobs of the senior leadership team is to make the right decision, even when it’s unpopular. And if if big tech companies are going to turn their back on the US Department of Defense, this country is going to be in trouble,” he said.

“I know everyone is conflicted about the current politics in this country, but this country is a gem,” he added.

While Google tried to frame its decision as taking a principled stand against misuse of technology by the government, Bezos chose another tack, stating that all technology can be used for good or ill. “Technologies are always two-sided. You know there are ways they can be misused as well as used, and this isn’t new,” Bezos told Wired25.

He’s not wrong of course, but it’s hard not to look at the size of the contract and see it as purely a business decision on his part. Amazon is as hot for that $10 billion contract as any of its competitors. What’s different in this talk is that Bezos made it sound like a purely patriotic decision, rather than economic one.

The Pentagon’s JEDI contract could have a value of up to $10 billion with a maximum length of 10 years. The contract is framed as a two year deal with two three-year options and a final one for two years. The DOD can opt out before exercising any of the options.

Bidding for the contract closed last Friday. The DOD is expected to choose the winning vendor next April.

Oct
12
2018
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IBM files formal JEDI protest a day before bidding process closes

IBM announced yesterday that it has filed a formal protest with the U.S. Government Accountability Office over the structure of the Pentagon’s winner-take-all $10 billion, 10-year JEDI cloud contract. The protest came just a day before the bidding process is scheduled to close. As IBM put it in a blog post, they took issues with the single vendor approach. They are certainly not alone.

Just about every vendor short of Amazon, which has remained mostly quiet, has been complaining about this strategy. IBM certainly faces a tough fight going up against Amazon and Microsoft.

IBM doesn’t disguise the fact that it thinks the contract has been written for Amazon to win and they believe the one-vendor approach simply doesn’t make sense. “No business in the world would build a cloud the way JEDI would and then lock in to it for a decade. JEDI turns its back on the preferences of Congress and the administration, is a bad use of taxpayer dollars and was written with just one company in mind.” IBM wrote in the blog post explaining why it was protesting the deal before a decision was made or the bidding was even closed.

For the record, DOD spokesperson Heather Babb told TechCrunch last month that the bidding is open and no vendor is favored. “The JEDI Cloud final RFP reflects the unique and critical needs of DOD, employing the best practices of competitive pricing and security. No vendors have been pre-selected,” she said.

Much like Oracle, which filed a protest of its own back in August, IBM is a traditional vendor that was late to the cloud. It began a journey to build a cloud business in 2013 when it purchased Infrastructure as a Service vendor SoftLayer and has been using its checkbook to buy software services to add on top of SoftLayer ever since. IBM has concentrated on building cloud services around AI, security, big data, blockchain and other emerging technologies.

Both IBM and Oracle have a problem with the one-vendor approach, especially one that locks in the government for a 10-year period. It’s worth pointing out that the contract actually is an initial two-year deal with two additional three year options and a final two year option. The DOD has left open the possibility this might not go the entire 10 years.

It’s also worth putting the contract in perspective. While 10 years and $10 billion is nothing to sneeze at, neither is it as market altering as it might appear, not when some are predicting the cloud will be $100 billion a year market very soon.

IBM uses the blog post as a kind of sales pitch as to why it’s a good choice, while at the same time pointing out the flaws in the single vendor approach and complaining that it’s geared toward a single unnamed vendor that we all know is Amazon.

The bidding process closes today, and unless something changes as a result of these protests, the winner will be selected next April

Oct
09
2018
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Microsoft shows off government cloud services with JEDI due date imminent

Just a day after Google decided to drop out of the Pentagon’s massive $10 billion, 10-year JEDI cloud contract bidding, Microsoft announced increased support services for government clients. In a long blog post, the company laid out its government focused cloud services.

While today’s announcement is not directly related to JEDI per se, the timing is interesting just three days ahead of the October 12th deadline for submitting RFPs. Today’s announcement is about showing just how comprehensive the company’s government-specific cloud services are.

In a blog post, Microsoft corporate vice president for Azure, Julia White made it clear the company was focusing hard on the government business. “In the past six months we have added over 40 services and features to Azure Government, as well as publishing a new roadmap for the Azure Government regions providing ongoing transparency into our upcoming releases,” she wrote.

“Moving forward, we are simplifying our approach to regulatory compliance for federal agencies, so that our government customers can gain access to innovation more rapidly. In addition, we are adding new options for buying and onboarding cloud services to make it easier to move to the cloud. Finally, we are bringing an array of new hybrid and edge capabilities to government to ensure that government customers have full access to the technology of the intelligent edge and intelligent cloud era,” White added.

While much of the post was around the value proposition of Azure in general such as security, identity, artificial intelligence and edge data processing services, there were a slew of items aimed specifically at the government clients.

For starters, the company is increasing its FedRAMP compliance, a series of regulations designed to ensure vendors deliver cloud services securely to federal government customers. Specifically Microsoft is moving from FedRAMP moderate to high ratings on 50 services.

“By taking the broadest regulatory compliance approach in the industry, we’re making commercial innovation more accessible and easier for government to adopt,” White wrote.

In addition, Microsoft announced it’s expanding Azure Secret Regions, a solution designed specifically for dealing with highly classified information in the cloud. This one appears to take direct aim at JEDI. “We are making major progress in delivering this cloud designed to meet the regulatory and compliance requirements of the Department of Defense and the Intelligence Community. Today, we are announcing these newest regions will be available by the end of the first quarter of 2019. In addition, to meet the growing demand and requirements of the U.S. Government, we are confirming our intent to deliver Azure Government services to meet the highest classification requirements, with capabilities for handling Top Secret U.S. classified data,” White wrote.

The company’s announcements, which included many other pieces that have been previously announced, is clearly designed to show off its government chops at a time where a major government contract is up for grabs. The company announced Azure Stack for Government in August, another piece mentioned in this blog post.

Sep
29
2018
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What each cloud company could bring to the Pentagon’s $10 B JEDI cloud contract

The Pentagon is going to make one cloud vendor exceedingly happy when it chooses the winner of the $10 billion, ten-year enterprise cloud project dubbed the Joint Enterprise Defense Infrastructure (or JEDI for short). The contract is designed to establish the cloud technology strategy for the military over the next 10 years as it begins to take advantage of current trends like Internet of Things, artificial intelligence and big data.

Ten billion dollars spread out over ten years may not entirely alter a market that’s expected to reach $100 billion a year very soon, but it is substantial enough give a lesser vendor much greater visibility, and possibly deeper entree into other government and private sector business. The cloud companies certainly recognize that.

Photo: Glowimages/Getty Images

That could explain why they are tripping over themselves to change the contract dynamics, insisting, maybe rightly, that a multi-vendor approach would make more sense.

One look at the Request for Proposal (RFP) itself, which has dozens of documents outlining various criteria from security to training to the specification of the single award itself, shows the sheer complexity of this proposal. At the heart of it is a package of classified and unclassified infrastructure, platform and support services with other components around portability. Each of the main cloud vendors we’ll explore here offers these services. They are not unusual in themselves, but they do each bring a different set of skills and experiences to bear on a project like this.

It’s worth noting that it’s not just interested in technical chops, the DOD is also looking closely at pricing and has explicitly asked for specific discounts that would be applied to each component. The RFP process closes on October 12th and the winner is expected to be chosen next April.

Amazon

What can you say about Amazon? They are by far the dominant cloud infrastructure vendor. They have the advantage of having scored a large government contract in the past when they built the CIA’s private cloud in 2013, earning $600 million for their troubles. It offers GovCloud, which is the product that came out of this project designed to host sensitive data.

Jeff Bezos, Chairman and founder of Amazon.com. Photo: Drew Angerer/Getty Images

Many of the other vendors worry that gives them a leg up on this deal. While five years is a long time, especially in technology terms, if anything, Amazon has tightened control of the market. Heck, most of the other players were just beginning to establish their cloud business in 2013. Amazon, which launched in 2006, has maturity the others lack and they are still innovating, introducing dozens of new features every year. That makes them difficult to compete with, but even the biggest player can be taken down with the right game plan.

Microsoft

If anyone can take Amazon on, it’s Microsoft. While they were somewhat late the cloud they have more than made up for it over the last several years. They are growing fast, yet are still far behind Amazon in terms of pure market share. Still, they have a lot to offer the Pentagon including a combination of Azure, their cloud platform and Office 365, the popular business suite that includes Word, PowerPoint, Excel and Outlook email. What’s more they have a fat contract with the DOD for $900 million, signed in 2016 for Windows and related hardware.

Microsoft CEO, Satya Nadella Photo: David Paul Morris/Bloomberg via Getty Images

Azure Stack is particularly well suited to a military scenario. It’s a private cloud you can stand up and have a mini private version of the Azure public cloud. It’s fully compatible with Azure’s public cloud in terms of APIs and tools. The company also has Azure Government Cloud, which is certified for use by many of the U.S. government’s branches, including DOD Level 5. Microsoft brings a lot of experience working inside large enterprises and government clients over the years, meaning it knows how to manage a large contract like this.

Google

When we talk about the cloud, we tend to think of the Big Three. The third member of that group is Google. They have been working hard to establish their enterprise cloud business since 2015 when they brought in Diane Greene to reorganize the cloud unit and give them some enterprise cred. They still have a relatively small share of the market, but they are taking the long view, knowing that there is plenty of market left to conquer.

Head of Google Cloud, Diane Greene Photo: TechCrunch

They have taken an approach of open sourcing a lot of the tools they used in-house, then offering cloud versions of those same services, arguing that who knows better how to manage large-scale operations than they do. They have a point, and that could play well in a bid for this contract, but they also stepped away from an artificial intelligence contract with DOD called Project Maven when a group of their employees objected. It’s not clear if that would be held against them or not in the bidding process here.

IBM

IBM has been using its checkbook to build a broad platform of cloud services since 2013 when it bought Softlayer to give it infrastructure services, while adding software and development tools over the years, and emphasizing AI, big data, security, blockchain and other services. All the while, it has been trying to take full advantage of their artificial intelligence engine, Watson.

IBM Chairman, President and CEO Ginni Romett Photo: Ethan Miller/Getty Images

As one of the primary technology brands of the 20th century, the company has vast experience working with contracts of this scope and with large enterprise clients and governments. It’s not clear if this translates to its more recently developed cloud services, or if it has the cloud maturity of the others, especially Microsoft and Amazon. In that light, it would have its work cut out for it to win a contract like this.

Oracle

Oracle has been complaining since last spring to anyone who will listen, including reportedly the president, that the JEDI RFP is unfairly written to favor Amazon, a charge that DOD firmly denies. They have even filed a formal protest against the process itself.

That could be a smoke screen because the company was late to the cloud, took years to take it seriously as a concept, and barely registers today in terms of market share. What it does bring to the table is broad enterprise experience over decades and one of the most popular enterprise databases in the last 40 years.

Larry Ellison, chairman of Oracle Corp.

Larry Ellison, chairman of Oracle. Photo: David Paul Morris/Bloomberg via Getty Images

It recently began offering a self-repairing database in the cloud that could prove attractive to DOD, but whether its other offerings are enough to help it win this contract remains to be to be seen.

Sep
26
2018
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Putting the Pentagon $10B JEDI cloud contract into perspective

Sometimes $10 billion isn’t as much as you think.

It’s true that when you look at the bottom line number of the $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud contract, it’s easy to get lost in the sheer size of it, and the fact that it’s a one-vendor deal. The key thing to remember as you think about this deal is that while it’s obviously a really big number, it’s spread out over a long period of time and involves a huge and growing market.

It’s also important to remember that the Pentagon has given itself lots of out clauses in the way the contract is structured. This could be important for those who are worried about one vendor having too much power in a deal like this. “This is a two-year contract, with three option periods: one for three years, another for three years, and a final one for two years,” Heather Babb, Pentagon spokeswoman told TechCrunch.

The contract itself has been set up to define the department’s cloud strategy for the next decade. The thinking is that by establishing a relationship with a single vendor, it will improve security and simplify overall management of the system. It’s also part of a broader view of setting technology policy for the next decade and preparing the military for more modern requirements like Internet of Things and artificial intelligence applications.

Many vendors have publicly expressed unhappiness at the winner-take-all, single vendor approach, which they believe might be unfairly tilted toward market leader Amazon. Still, the DOD, which has stated that the process is open and fair, seems determined to take this path, much to the chagrin of most vendors, who believe that a multi-vendor strategy makes more sense.

John Dinsdale, chief analyst at Synergy Research Group, a firm that keeps close tabs on the cloud market, says it’s also important to keep the figure in perspective compared to the potential size of the overall market.

“The current worldwide market run rate is equivalent to approximately $60 billion per year and that will double in less than three years. So in very short order you’re going to see a market that is valued at greater than $100 billion per year – and is continuing to grow rapidly,” he said.

Put in those terms, $10 billion over a decade, while surely a significant figure, isn’t quite market altering if the market size numbers are right. “If the contract is truly worth $10 billion that is clearly a very big number. It would presumably be spread over many years which then puts it at only a very small share of the total market,” he said.

He also acknowledges that it would be a big feather in the cap of whichever company wins the business, and it could open the door for other business in the government and private sector. After all, if you can handle the DOD, chances are you can handle just about any business where a high level of security and governance would be required.

Final RFPs are now due on October 12th with a projected award date of April 2019, but even at $10 billion, an astronomical sum of money to be sure, it ultimately might not shift the market in the way you think.

Sep
15
2018
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Why the Pentagon’s $10 billion JEDI deal has cloud companies going nuts

By now you’ve probably heard of the Defense Department’s massive winner-take-all $10 billion cloud contract dubbed the Joint Enterprise Defense Infrastructure (or JEDI for short).
Star Wars references aside, this contract is huge, even by government standards.The Pentagon would like a single cloud vendor to build out its enterprise cloud, believing rightly or wrongly that this is the best approach to maintain focus and control of their cloud strategy.

Department of Defense (DOD) spokesperson Heather Babb tells TechCrunch the department sees a lot of upside by going this route. “Single award is advantageous because, among other things, it improves security, improves data accessibility and simplifies the Department’s ability to adopt and use cloud services,” she said.

Whatever company they choose to fill this contract, this is about modernizing their computing infrastructure and their combat forces for a world of IoT, artificial intelligence and big data analysis, while consolidating some of their older infrastructure. “The DOD Cloud Initiative is part of a much larger effort to modernize the Department’s information technology enterprise. The foundation of this effort is rationalizing the number of networks, data centers and clouds that currently exist in the Department,” Babb said.

Setting the stage

It’s possible that whoever wins this DOD contract could have a leg up on other similar projects in the government. After all it’s not easy to pass muster around security and reliability with the military and if one company can prove that they are capable in this regard, they could be set up well beyond this one deal.

As Babb explains it though, it’s really about figuring out the cloud long-term. “JEDI Cloud is a pathfinder effort to help DOD learn how to put in place an enterprise cloud solution and a critical first step that enables data-driven decision making and allows DOD to take full advantage of applications and data resources,” she said.

Photo: Mischa Keijser for Getty Images

The single vendor component, however, could explain why the various cloud vendors who are bidding, have lost their minds a bit over it — everyone except Amazon, that is, which has been mostly silent, happy apparently to let the process play out.

The belief amongst the various other players, is that Amazon is in the driver’s seat for this bid, possibly because they delivered a $600 million cloud contract for the government in 2013, standing up a private cloud for the CIA. It was a big deal back in the day on a couple of levels. First of all, it was the first large-scale example of an intelligence agency using a public cloud provider. And of course the amount of money was pretty impressive for the time, not $10 billion impressive, but a nice contract.

For what it’s worth, Babb dismisses such talk, saying that the process is open and no vendor has an advantage. “The JEDI Cloud final RFP reflects the unique and critical needs of DOD, employing the best practices of competitive pricing and security. No vendors have been pre-selected,” she said.

Complaining loudly

As the Pentagon moves toward selecting its primary cloud vendor for the next decade, Oracle in particular has been complaining to anyone who will listen that Amazon has an unfair advantage in the deal, going so far as to file a formal complaint last month, even before bids were in and long before the Pentagon made its choice.

Photo: mrdoomits for Getty Images (cropped)

Somewhat ironically, given their own past business model, Oracle complained among other things that the deal would lock the department into a single platform over the long term. They also questioned whether the bidding process adhered to procurement regulations for this kind of deal, according to a report in the Washington Post. In April, Bloomberg reported that co-CEO Safra Catz complained directly to the president that the deal was tailor made for Amazon.

Microsoft hasn’t been happy about the one-vendor idea either, pointing out that by limiting itself to a single vendor, the Pentagon could be missing out on innovation from the other companies in the back and forth world of the cloud market, especially when we’re talking about a contract that stretches out for so long.

As Microsoft’s Leigh Madden told TechCrunch in April, the company is prepared to compete, but doesn’t necessarily see a single vendor approach as the best way to go. “If the DOD goes with a single award path, we are in it to win, but having said that, it’s counter to what we are seeing across the globe where 80 percent of customers are adopting a multi-cloud solution,” he said at the time.

He has a valid point, but the Pentagon seems hell bent on going forward with the single vendor idea, even though the cloud offers much greater interoperability than proprietary stacks of the 1990s (for which Oracle and Microsoft were prime examples at the time).

Microsoft has its own large DOD contract in place for almost a billion dollars, although this deal from 2016 was for Windows 10 and related hardware for DOD employees, rather than a pure cloud contract like Amazon has with the CIA.

It also recently released Azure Stack for government, a product that lets government customers install a private version of Azure with all the same tools and technologies you find in the public version, and could prove attractive as part of its JEDI bid.

Cloud market dynamics

It’s also possible that the fact that Amazon controls the largest chunk of the cloud infrastructure market, might play here at some level. While Microsoft has been coming fast, it’s still about a third of Amazon in terms of market size, as Synergy Research’s Q42017 data clearly shows.

The market hasn’t shifted dramatically since this data came out. While market share alone wouldn’t be a deciding factor, Amazon came to market first and it is much bigger in terms of market than the next four combined, according to Synergy. That could explain why the other players are lobbying so hard and seeing Amazon as the biggest threat here, because it’s probably the biggest threat in almost every deal where they come up against each other, due to its sheer size.

Consider also that Oracle, which seems to be complaining the loudest, was rather late to the cloud after years of dismissing it. They could see JEDI as a chance to establish a foothold in government that they could use to build out their cloud business in the private sector too.

10 years might not be 10 years

It’s worth pointing out that the actual deal has the complexity and opt-out clauses of a sports contract with just an initial two-year deal guaranteed. A couple of three-year options follow, with a final two-year option closing things out. The idea being, that if this turns out to be a bad idea, the Pentagon has various points where they can back out.

Photo: Henrik Sorensen for Getty Images (cropped)

In spite of the winner-take-all approach of JEDI, Babb indicated that the agency will continue to work with multiple cloud vendors no matter what happens. “DOD has and will continue to operate multiple clouds and the JEDI Cloud will be a key component of the department’s overall cloud strategy. The scale of our missions will require DOD to have multiple clouds from multiple vendors,” she said.

The DOD accepted final bids in August, then extended the deadline for Requests for Proposal to October 9th. Unless the deadline gets extended again, we’re probably going to finally hear who the lucky company is sometime in the coming weeks, and chances are there is going to be lot of whining and continued maneuvering from the losers when that happens.

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