Google, Oracle, Amazon, and Microsoft awarded $9 billion Pentagon cloud deals
Story by Jordan Novet •
Of the four companies receiving cloud-computing contracts from the Pentagon, all of them had received requests for bids from the U.S. federal agency last year.
At that time, the General Services Administration didn't expect that Oracle, a lesser player in the cloud-infrastructure business, would be able to meet the Pentagon's needs. But its contract could turn out to be just as big as those Amazon, Google and Microsoft are getting.
The Pentagon building in Washington, D.C.© Provided by CNBC
The Pentagon said Wednesday that Amazon, Google, Microsoft and Oracle each received a cloud-computing contract that can reach as high as $9 billion each through 2028.
The outcome of the Joint Warfighting Cloud Capability, or JWCC, effort is in line with the U.S. Defense Department's effort 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.
Originally, the Pentagon had awarded the Joint Enterprise Defense Infrastructure, or JEDI, to Microsoft in 2019. A legal battle ensued as Amazon, the top player in the cloud infrastructure market, challenged the Pentagon's decision.
Related video: Meta, Amazon, Google: Why Layoffs At Big Tech? | Fired Employees Speak Up | Let's Talk Jobs (Moneycontrol)
Duration 17:26 View on Watch
In 2020, the Pentagon's watchdog conducted a review and ruled that there was no evidence to conclude that the Trump Administration had intervened in the process of awarding the contract. Months later the Pentagon announced it would stick with Microsoft for the JEDI deal.
Last year the Pentagon changed its approach, asking for bids from Amazon, Google, Microsoft and Oracle to address cloud needs. But the General Services Administration stated at the time that only Amazon and Microsoft seemed to be able to meet the Pentagon's requirements.
Wednesday's result is a boon in particular for Oracle, which analysts don't see in the top tier of companies offering cloud-based computing services. Oracle generated $900 million in cloud infrastructure revenue in the quarter that ended Aug. 31, a small fraction of the $20.5 billion total for Amazon's cloud subsidiary, Amazon Web Services, in the third quarter.
All four of the technology companies have won indefinite delivery, indefinite quantity, or IDIQ, contracts, meaning that they can involve an indefinite amount of services for a specific period of time.
"The purpose of this contract is to provide the Department of Defense with enterprise-wide globally available cloud services across all security domains and classification levels, from the strategic level to the tactical edge," the Defense Department said.
Story by Jordan Novet •
Of the four companies receiving cloud-computing contracts from the Pentagon, all of them had received requests for bids from the U.S. federal agency last year.
At that time, the General Services Administration didn't expect that Oracle, a lesser player in the cloud-infrastructure business, would be able to meet the Pentagon's needs. But its contract could turn out to be just as big as those Amazon, Google and Microsoft are getting.
The Pentagon building in Washington, D.C.© Provided by CNBC
The Pentagon said Wednesday that Amazon, Google, Microsoft and Oracle each received a cloud-computing contract that can reach as high as $9 billion each through 2028.
The outcome of the Joint Warfighting Cloud Capability, or JWCC, effort is in line with the U.S. Defense Department's effort 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.
Originally, the Pentagon had awarded the Joint Enterprise Defense Infrastructure, or JEDI, to Microsoft in 2019. A legal battle ensued as Amazon, the top player in the cloud infrastructure market, challenged the Pentagon's decision.
Related video: Meta, Amazon, Google: Why Layoffs At Big Tech? | Fired Employees Speak Up | Let's Talk Jobs (Moneycontrol)
Duration 17:26 View on Watch
In 2020, the Pentagon's watchdog conducted a review and ruled that there was no evidence to conclude that the Trump Administration had intervened in the process of awarding the contract. Months later the Pentagon announced it would stick with Microsoft for the JEDI deal.
Last year the Pentagon changed its approach, asking for bids from Amazon, Google, Microsoft and Oracle to address cloud needs. But the General Services Administration stated at the time that only Amazon and Microsoft seemed to be able to meet the Pentagon's requirements.
Wednesday's result is a boon in particular for Oracle, which analysts don't see in the top tier of companies offering cloud-based computing services. Oracle generated $900 million in cloud infrastructure revenue in the quarter that ended Aug. 31, a small fraction of the $20.5 billion total for Amazon's cloud subsidiary, Amazon Web Services, in the third quarter.
All four of the technology companies have won indefinite delivery, indefinite quantity, or IDIQ, contracts, meaning that they can involve an indefinite amount of services for a specific period of time.
"The purpose of this contract is to provide the Department of Defense with enterprise-wide globally available cloud services across all security domains and classification levels, from the strategic level to the tactical edge," the Defense Department said.
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