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Amazon, Google, Microsoft, Oracle Win $9 Billion Pentagon Cloud Contracts

The Pentagon building in Washington, DC

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The Pentagon announced this on Wednesday Amazon, Google, Microsoft and Oracle each won a cloud computing contract that could reach as much as $9 billion by 2028.

The outcome of the Joint Warfighting Cloud Capability, or JVCC, effort is in line with the U.S. Department of Defense’s efforts to rely on multiple providers of remotely operated infrastructure technology, as opposed to relying on a single company, a strategy promoted during the Trump administration.

A growing number of enterprises are also trying to rely on more than one cloud provider. In some cases, they rely on specialized capabilities on one and most front-end and back-end workloads on the other. In other cases, they come down to price. Having more than one cloud could make organizations more confident that they can withstand service disruptions caused by outages.

Originally, the Pentagon awarded the Joint Defense Enterprise Infrastructure, or JEDI, to Microsoft in 2019. A legal battle ensued as Amazon, the largest player in the cloud infrastructure market, challenged the Pentagon’s decision.

In 2020, a Pentagon watchdog conducted a review and ruled that there was no evidence to suggest that the Trump administration had intervened in the contract award process. A few months later, the Pentagon announced that it would stick with Microsoft in the JEDI deal.

Last year, the Pentagon changed its approach, seeking bids from Amazon, Google, Microsoft and Oracle to address its cloud needs. But the General Services Administration said at the time that only Amazon and Microsoft could meet the Pentagon’s requirements.

Wednesday’s result is a boon especially for Oracle, which analysts don’t see in the top tier of companies that offer cloud-based computing services. Oracle generated $900 million in cloud infrastructure revenue in the quarter ended Aug. 31, a fraction of the $20.5 billion total for Amazon’s cloud subsidiary, Amazon Web Services, in the third quarter.

All four technology companies were awarded unlimited supply, unlimited quantity, or IDIK contracts, which means they can include an unlimited amount of services for a specified period of time.

“The purpose of this contract is to provide the Department of Defense with globally available enterprise-wide cloud services across all security domains and classification levels, from the strategic to the tactical level,” the Department of Defense said.

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