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Microsoft beats Amazon to the Pentagon’s $10 billion cloud-computing contract

WASHINGTON (Reuters) – Microsoft Corp. (nasdaq: msft. (Wholly-owned.D) has won the Pentagon’s $10 billion cloud-computing contract with the Ministry of Defence said on Friday, beating the favourite Amazon.com Inc. (AMZN.D).

FILE PHOTO: Visitors stand in front of a screen in Microsoft’s new Oxford street store opening, London, Britain, July 9, 2019. (REUTERS photo/Simon Dawson

The Joint Venture of the Defence Infrastructure in the Cloud (of the JEDI) the contract is part of a wider set of digital modernization, the Pentagon, intended to be more technologically agile.

However, the contracting process for a long time and have been involved in a conflict-of-interest, causes of action, and even the attention of President Donald Trump, who has publicly taken swipes at the Amazon and its founder Jeff Bezos.

Oracle Corp (ORCL.(N) had expressed concerns about the award process for the contract, including the role of a former Amazon, employee who worked on the project for the Ministry of Defence, but recused himself, and later left the Department of Defense, and then went back to Amazon’s Web Services.

Some of the companies, as well as just a few of the prize, the winner an unfair advantage in the follow-on work. The Pentagon said it planned to use the award for future cloud based offerings to multiple contractors.

This week, the united states Secretary of Defense Mark Esper is removed from the review of the deal due to his adult son’s employment with one of the original agreement to the applicant (s), IBM Corp (IBM.(N). IBM had previously bid for the contract, but had already been eliminated from the competition.

In a statement made to the announcement made by Microsoft as the winner, the Pentagon expresses its opinion that the competition has been run fairly and legally.

“To all the offers were fair, treated, and evaluated in accordance with the application of the stated assessment criteria. Prior to the award of the contract, the company is granted by the DOD’s Inspector General, who is aware of the decision to go for it,” he said.

In a statement, an Amazon Web Services spokesman said the company was “surprised by this finding.” The company said that it was an “in-depth evaluation is purely on the competitive range” would be, “it is clear that it will lead to a different conclusion”, the statement said.

Microsoft shares were up 2.5% to $144.35, in after-hours trading following the news. Amazon shares were down 0.98% to $1,744.12.

The Pentagon said that it had been awarded more than $11 billion in 10 separate cloud contracts over the past two years.

“If we are to continue with the implementation of the DOD’s Cloud Strategy is in place, and the additional services have been scheduled for both the cloud services and any additional migration, and integration solutions that are needed in order to be an effective roll-out of the cloud,” the Pentagon said.

Reporting by Phil Stewart; Editing by Cynthia Osterman and Sonya Hepinstall

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