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Amazon, Google, Microsoft, Oracle get $9 billion Pentagon cloud deals

The Pentagon building in Washington, DC

Employees | AFP | Getty Images

The Pentagon said Wednesday Amazon, Google, Microsoft and Oracle each received a cloud computing contract that could reach as high as $9 billion each through 2028.

The outcome of the Joint Warfighting Cloud Capability, or JWCC, is in line with the US Department of Defense̵[ads1]7;s efforts 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.

An increasing number of companies have also tried to rely on more than one cloud provider. In some cases, they rely on specialized capabilities on one and the majority of front-end and back-end workloads on another. Other times, they come down to cost. Having more than one cloud can make organizations more confident that they can withstand service disruptions caused by outages.

Originally, the Pentagon had awarded the Joint Enterprise Defense Infrastructure, or JEDI, to Microsoft in 2019. A legal battle ensued when Amazon, the top player in the cloud infrastructure market, challenged the Pentagon’s decision.

In 2020, the Pentagon’s watchdog conducted a review and determined that there was no evidence to conclude that the Trump administration had interfered 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, soliciting bids from Amazon, Google, Microsoft and Oracle to meet cloud needs. But the General Services Administration stated at the time that only Amazon and Microsoft appeared 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 that offer cloud-based computing services. Oracle generated $900 million in cloud infrastructure revenue in the quarter 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 technology companies have won indefinite-time, indefinite-quantity, or IDIQ, contracts, meaning 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 global globally accessible cloud services across all security domains and classification levels, from the strategic level to the tactical edge,” the Defense Department said.

SEE: About 75% of our customers use multicloud and data centers, says VMware CEO

Amazon, Google, Microsoft, Oracle get  billion Pentagon cloud deals

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