The battle continues over a $10 billion contract to modernize the IT infrastructure of the Department of Defense.
On Thursday, the US Court of Federal Claims issued a preliminary injunction as Amazon sought to stop work on the project it had once been in the running for. The case has garnered the attention of experts and industry watchers who are curious to see how a cloud project of this magnitude is handled in the public sector.
Last October, Microsoft beat AWS for the Joint Enterprise Defense Infrastructure (JEDI) contract to provide a far-reaching, cloud overhaul for the Department of Defense and related military services. The injunction came reportedly on the eve of the commencement of the project.
Amazon filed a lawsuit last November to contest the award of the contract to Microsoft, then in late January requested a halt on work on the project as the legal wrangling continued. Last December, AWS CEO Andy Jassy shed some light on his company’s complaint, citing very public acrimony from the White House targeted at Jeff Bezos and Amazon.
The complex fight over the contract also includes challenges from Oracle, who sought separate legal action objecting to how the project was being awarded. Oracle’s complaints stretch back to when AWS was assumed to be the frontrunner for the project and continued after Microsoft was chosen.
In addition to the obviously lucrative nature of the contract, JEDI represents a significant moment in the digital transformation era. Tim Beerman, CTO at managed service provider Ensono, says the awarding of the contract was a boon for Microsoft as it builds its presence as a cloud services provider. “While it is a lot of money, I don’t think it is going to have a strong impact to either [Microsoft or Amazon]. They’re both very big and growing,” he says. Challenges to the awarding of the contract are not entirely surprising, Beerman says, given the magnitude and scope of the project and the parties vying to oversee JEDI. “It’s not unusual,” he says. “You have a lot of people who are heavily invested in this.”
As the proceedings continue, Beerman says he will watch to see if the contract will be resolved based on technical capabilities or commercial grounds such as overall cost.
Microsoft’s initial win of the contract was a profound moment, says Sean Feeney, cloud practice director at digital consultancy Nerdery. “It was really Amazon’s contract to lose given that the DoD is already on AWS,” he says. Having another cloud provider swoop in and win a substantial chunk of business could potentially change the game in the public sector, Feeney says. It raises the notion of a significant contender challenging AWS’s dominance of the cloud space. “I don’t think [the contract] moves the financial needle that much in the short term,” he says, “but it does give that perception.”
As the legal challenges to the JEDI contract award persist, Feeney says he foresees a likely eventual result to the disputes. “The realistic outcome here, if this is anything like most other contested government contracts, they’ll probably split the deal,” he says. “This will probably wind up being a multicloud award.” Feeney says that would have been a better approach at the start of the process. Given that the contract is meant to span 10 years, newer innovation may arise that disrupts the DoD’s infrastructure yet again. “Azure literally just turned 10,” he says, citing its initial release in February 2010. “Ten years from now, who knows what levels of technology will be available?”Joao-Pierre S. Ruth has spent his career immersed in business and technology journalism first covering local industries in New Jersey, later as the New York editor for Xconomy delving into the city's tech startup community, and then as a freelancer for such outlets as ... View Full Bio