Microsoft Wins $10 Billion Defense Contract

The hotly contested defense contract was awarded to Microsoft. The US Department of Defense instituted the commitment to provide a framework for their joint enterprise defense infrastructure (JEDI) cloud that saw the likes of Oracle and Amazon Web Services competing to become the provider. The win by Microsoft has seen other companies protesting that it may give the tech giant a head-start on any further development that the Department of Defense may deem necessary. However, the governmental body stated that they would be issuing additional contracts to multiple companies in the future.

A Question of Fairness

The JEDI bidding has come in for some criticism previously, with Oracle raising the issue about fairness in the bidding process. The contention came after Oracle noted that Amazon had an employee that left their business to go to the Department of Defense as an employee then returned to their own company. Oracle brought a suit against the Department of Defense because of this issue, but the suit was dismissed in July of this year. Oracle mounted a second attempt at getting the JEDI bidding revamped to be more transparent, but the award of the contract to Microsoft means that the suit has no basis.

Amazon Web Services released a statement claiming that they were surprised about the award of the contract to Microsoft. According to the spokesperson from AWS, a detailed comparison from an objective standpoint would have brought a different conclusion to the award of the contract. The Pentagon underscored the fact that all of the undertakings that enabled the award of the agreement were done in a free and fair manner.

Microsoft Shares Rise

As an obvious consequence of the tech giant being the winner of the contract, shares of Microsoft immediately started to rise, posting a 2.5% gain after hours. Conversely, Amazon’s share price dipped by 0.95%, showing a lack of shareholders’ confidence in the company’s leadership. Whether the Pentagon’s future cloud contracts will be awarded through the same bidding method as the JEDI framework contract remains to be seen.