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Microsoft’s $ 10 billion Pentagon deal is in jeopardy amid Amazon’s struggle

Microsoft is threatened with a $ 10 billion deal to provide cloud computing services to the Pentagon, a deal that the government has threatened to cancel altogether after years of litigation.

The Pentagon has said it will reconsider the controversial purchase if a federal judge rejects Amazon’s claims that former President Donald Trump’s mess cost the company all the winning contract. This means that the fate of the cloud project, which the Pentagon considers important for its military fighters, may remain in the hands of the US Federal Court of Appeals, which may soon decide on the charges against Amazon.

The Pentagon said last month that it would take too long to prove in court that Microsoft had not been adversely influenced by the White House in its decision to grant a lucrative cloud deal. If the judge allows Amazon to assert its biased claims in the case, the government may decide to end the fighting.

“If the court rejects the government’s motion, we will likely face an even longer trial,” Pentagon spokesman Aon Kirby told a news conference late last month. «The DOD: [Department of Defense] The Director General of Information will re-evaluate the forthcoming strategy. “

The warning is another turning point in the controversial process, which includes years of legal challenges, behind-the-scenes lobbying and a public relations campaign by tech rivals to pick Amazon as the lead cloud deal when it opened in 2018. More than one Microsoft winner Years later, the Department of Defense is still fighting to use the acronym for Joint Enterprise Defense Infrastructure Cloud, or JEDI, to create Star Wars images as a primary data warehouse for military services around the world. The deal is worth $ 10 billion over a decade.

There are signs that the Pentagon is already moving forward. The Department of Defense is talking about its other cloud contracts beyond JEDI, և the major cheerleaders of the program have left the department, leaving the new leaders to decide on purchases inherited from the Trump administration. Even Microsoft executives are trumpeting all the other work the company plans to do for the Department of Defense as the JEDI deal, which adds to its image, moves south.

“We know very well that the Department of Defense needs the JEDI project to” support its mission, “said Tom Keane, vice president of Microsoft Azure. “But we are not waiting for one vehicle. “We use every means we can to cooperate with the Pentagon,” he said.

The Ministry of Defense stressed that it has 13 other cloud projects, including partnerships with Oracle, Amazon, General Dynamics Information Technology and even Microsoft. The software giant expanded Pentagon staff access to its video և chat tools through Microsoft Teams during an epidemic last year.

Last year, the CIA hired a number of companies to offer cloud services to the intelligence community, a set of national security departments that extends to several agencies, including the Pentagon, eight years after the agency signed a $ 600 million cloud deal with Amazon.

Meanwhile, the most visible champions of the approach to the only source of the JEDI project came from the Ministry of Defense. Former director of the Digital Defense Service, Chris Lynch, who designed the project, has left to start a new technology company. Denta Dizzy, the former Pentagon Chief Intelligence Officer (CIO), was replaced by John on Sherman, who previously served as CIO in the intelligence community when he decided to fully embrace many vendors.

Initially, companies such as Oracle և International Business Machines, which withdrew before the tender, pressured the Pentagon to select several vendors for the contract that they said were ready for Amazon. Amazon Web Services, the company’s cloud division, was widely regarded as the leader of the deal as it won the CIA deal to earn the highest levels of federal security clearance.

When the contract was announced, the art of installing corporate clouds was no longer relying on one seller for everything. Many customers chose many cloud vendors և choosing the best option for specific tasks. The JEDI deal seemed to represent an earlier time in cloud migration, with fewer choices, with the vast majority of deals going to Amazon. The Ministry of Defense said at the time that the use of multiple cloud providers would increase the complexity of the program.

Following Microsoft’s surprise victory, the e-commerce giant filed a lawsuit over the fact that its rivals’s personal maneuver և Trump’s famous animus for Amazon founder ff Bezos, as evidenced by tweets և in public statements during his campaign և presidency դժվար For the Pentagon. choose the winner impartially.

As a complaint, Amazon asked the judge for permission to question Trump, former Secretary of Defense James Ames Metis and other people involved in the selection of “Mark Esperin”. Lawyer Patricia Campbell-Smith has yet to make a decision on whether to reject Amazon’s biased allegations or grant more requests for disclosure, but that decision could be made at any time.

To assert its claim, Amazon has compiled a list of actions that show the White House’s bias toward Amazon. The company cited a book by Mattis’s Guy Snodgrass, which claims that in the summer of 2018, Trump told Metis to “spoil Amazon” and shut it down. Matisse did not do what Trump asked, wrote Snodgrass.

The lawsuit alleges Trump’s comments at a news conference in July 2019, when he openly doubted whether the JEDI deal would be competitively priced. Late that month, Trump tweeted a television coverage describing the JEDI deal as “Bezos Rescue,” according to the lawsuit.

The Pentagon և Acting as a Defendant և Microsoft claims that Amazon should have voiced its interference in the policy earlier. The United States says Amazon’s allegations are based on a report by the Department of Defense Inspector General, which found no evidence that Trump influenced the award decision. A Pentagon staffer who assisted in compiling the report said that the White House had limited its investigation into the deal.

Although Microsoft could lose any lost revenue through other federal transactions, the liquidation of JEDI would still hurt, largely by taking away one of the simplest confirmations so far that the company had reached Amazon through Amazon services. Following the announcement of the deal, Microsoft analysts said it was “the biggest cloud deal in history”, a “big win” that “validates Azure as a leading hyperspace cloud” and signaled that Azure was continuing its position. Acquired through AWS. “

Procurement expert George Vorge, a professor at Washington University School of Law, said Stephen Schunner said the judge was unlikely to drop any of Amazon’s biased allegations.

“I find it hard to imagine a scenario where the Court, after all these months, just says, ‘Don’t worry, I’m sorry for the inconvenience or the delay,'” he e-mailed.

The Amazon case came after the Department of Defense faced a number of other legal obstacles to JEDI implementation. So far, the Pentagon has faced two challenges with the Government Accountability Office, two lawsuits in federal court, and an investigation by the Office of the Inspector General. Although it has prevailed so far, legal challenges have forced the Pentagon to delay implementation of the program for more than two years after its scheduled launch date.

“Not only has it been delayed for so long, but it has been delayed for so long that the world is changing,” said Stan Solovay, Bill Clinton, vice president of defense and now president of the consulting firm Celero Strategies. “The question is, do you really want or need a cloud solution?”

Even if the court rejects Amazon’s politically biased allegations, it will still take several months to challenge the company’s other complaints about the Pentagon’s appraisal process. Win or lose a business, DOD says it will get the cloud computing services it needs.

“The Department continues to have an urgent, unmet need,” the Pentagon said in a statement. “This requirement exceeds any purchase, we will be ready to ensure that it is done one way or another.”


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