This April, the US Department of Defense is set to award a multi-year contract to a single cloud provider in what promises to be a massive win for either Microsoft or Amazon. The contract, said to be worth some $10 billion, which will be some 25% of the current cloud market. That's huge. Amazon is thought to be the leader in the clubhouse, almost a foregone conclusion, but the Pentagon delayed awarding the contract late last year, and Microsoft is pushing hard to stay in the running, even after Google dropped out of the race.
late last year, Microsoft came under criticism for its relationship with the US military, including from some of its own employees, but company president Brad Smith staunchly defended the relationship, saying that the company would continue to make sure the country has access to the best technology, including from Microsoft.
According to a new post on Seeking Alpha, over the next few years the Pentagon will move some 3.4 million users and 4 million devices off of private servers onto the cloud. While Amazon is thought to have the upper hand (so much so that Oracle and IBM, among others, have filed protests with the US GAO, saying the contract favors Amazon), but under Satya Nadella, Microsoft has been working hard to gain the favor of the Pentagon, promoting their security and IT chops, as well as Defense Department familiarity with Windows and Office. Early this year Microsoft expects to achieve "Impact Level 6" security, on par with Amazon, and Microsoft has been pushing hard to tighten their bonds with the US Government, according to the post:
There are many instances in the last four years where the DoD continued to choose Microsoft for software and operating systems. For instance, in May of 2018, the United States Intelligence Community extended its agreement to use MS products such as Azure Government, Office 365 for US Government, and Windows 10 in a joint licensing agreement with Dell. In this announcement, MS stated that over “10 million government customers from every federal cabinet level, including the Department of Defense” rely on MS’s Cloud for Government.
In 2016, MS won a five-year contract to provide technical support to the Defense Information Systems Agency (DISA). In 2016, the original Windows 10 agreement that took effect in 2017 included 4 million laptops, desktops and mobile devices. More recently, in November of 2018, MS won a $480 million contract with the U.S. government to bring 100,000 augmented reality headsets into the military’s arsenal. The two-year contract will help soldiers prepare for combat training.
Amazon holds the lead position in the race for this lucrative, one winner contract, but Microsoft continues to come on strong. An award to Amazon would come as no surprise, but if Microsoft were to pull off this major coup, it could be among the biggest stories of the year.