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Home / Business / Microsoft won JEDI because of its cloud, not Trump's fight with Amazon

Microsoft won JEDI because of its cloud, not Trump's fight with Amazon



  • President Trump has been a vocal critic of Amazon, and is reportedly going as far as trying to prevent Amazon Web Services from winning the $ 10 billion Pentagon Joint Enterprise Defense Infrastructure (JEDI) contract.
  • When Microsoft was awarded the JEDI contract on Friday, many assumed that Trump played some kind of role in the decision since AWS was seen as the clear front runner.
  • However, experts say the Trump factor in the JEDI decision is overrated and that Microsoft won the deal on its own merits as a strong player in the cloud computing space.
  • "Not only did they have the infrastructure to take on Amazon, but they also had experience working in this legacy IT environment, so it makes sense that the DoD could choose Microsoft," said James Bach, a federal spending analyst at Bloomberg LP, for Business Insider.
  • Still, aside from Trump, Oppenheimer analysts said "politics have probably played a key role" in the JEDI process, "since AMZN has been conducting vernment review from both left and right."
  • However, at least an expert that the shadow of Trump over the JEDI deal could end up actually helping Amazon Web Services in the long run, as government agencies try to discourage the public from believing that there is external influence in the decision-making process.
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President Donald Trump has been a vocal critic of Amazon in general and CEO Jeff Bezos in particular ̵

1; as well as the Washington Post, the Bezos-owned newspaper that has published widely reporting criticism of the president.

Reports indicate that Trump's opposition to Amazon went as far as the $ 10 billion Pentagon contract in Joint Enterprise Defense Infrastructure (JEDI), which Amazon Web Services cloud computing division was the favorite to win.

Earlier this year, Trump allegedly wanted to "shift" the bid process for JEDI due to concerns that Amazon would get hold of the deal. Even before Trump last year, former Secretary of Defense James Mattis pointed out "screwing Amazon" out of the contract, according to an upcoming book. In fact back in August Sen. Democrat Markus Warner raised concern that Trump would use JEDI as a means to punish critics in the media.

So when the Department of Defense announced on Friday that Microsoft had scored the JEDI contract, the immediate reaction of many visitors was to assume that the huge upset over AWS had everything to do with Trump.

However, several industry experts and Wall Street analysts say they believe any Trump factor in the JEDI decision was overstated, and that all signs point to Microsoft winning the deal on its own merits as a heavy hitter in the cloud computing space.

& # 39; I hesitate to say that Trump was the cause & # 39;

"I hesitate to say that Trump was the reason why Amazon didn't win this," James Bach, a federal spending analyst at Bloomberg LP, told Business Insider. "Microsoft was more than capable of winning this without any kind of influence."

At the same time, Bach said, it is definitely "atypical" for a president to get involved in these types of public procurement contracts at all. [19659009] Daniel Newman, founding partner and principal analyst at Futurum Research, told Business Insider that Trump's commitment to the deal raises questions about the final outcome.

"You have two very, very solid companies, and then you have all these extraneous factors like Trump … it's really disappointing that we couldn't see a price worked out strictly based on which solution offered the best technology to cover needs, "Newman said.

Microsoft's Advantage

Still, several of the experts we spoke to said that Microsoft, and its Azure cloud platform, are more than up to the task of helping the Pentagon modernize its IT infrastructure.

"Not only did they have the infrastructure to take on the Amazon, but they also had experience working in this legacy IT environment, so it makes sense that DoD can choose Microsoft for it, because Microsoft has this ability to do the next general IT migration and at the same time help them manage and rationalize their previous footprint, "Bach said.

While Microsoft lacked the necessary opportunities to qualify for JEDI at the beginning of the bidding process, experts said that the company has made great strides in closing technology capability with Amazon Web Services – and at the same time making it more attractive to customers in regulated industries such as the public sector.

"MSFT has worked hard to appeal to late adopted industries, such as government, health care, financial institutions. MSFT has been prudent in obtaining compliance / governance certifications and improving safety to win over these adopters," Oppenheimer analysts said in a note to clients Sunday.

Politics still play a role

Whether or not Trump played a role in the JEDI procurement process, some experts said that the policy may still have included the decision to assign it to Microsoft.

Trump's personal stance, the negotiator has come under fire from key Democrats such as presidential candidate Senator Elizabeth Warren, who has said that tech titans like Amazon are exerting too much power and should be broken up.

"Politics probably played a key role that AMZN has been under government control from both the left and the right," the Oppenheimer analysts said of the JEDI agreement.

In addition, after spending much of the past year averting an ultimately unsuccessful lawsuit from Oracle over the JEDI allocation process, Amazon's relationship with the DoD has been somewhat strained, Christopher Cornillie, a federal technology market analyst at Bloomberg Government, said , to Business Insider.

"[The] JEDI court battle made everyone I do not realize how aggressively Amazon pursued federal contracts. They spent millions a year on lobbying and strategically hired a number of former government officials who they thought would give them an advantage in upcoming acquisitions. This was on display with JEDI, "Cornillie said.

A silver lining for Amazon

The JEDI story is unlikely to end here for Amazon.

Amazon on Friday was "still evaluating options," a celebrity told Business Insider. Wedbush analyst Daniel Ives said in a note to clients on Friday that his firm "fully" expected Amazon "and others" to challenge the JEDI ruling in court.

Oddly enough, but at least one expert believes that shadowing Trump over the JEDI deal could end up actually helping Amazon Web Services in the long run. At least some government armies may feel a need to show that they are willing to choose the best technology, no matter who it comes from.

"That could mean that any government project pursued by Amazon could be affected in the same way by Trump's inequality," Charles King, Pound-IT's president and chief analyst, told Business Insider. "But it could also lead other agencies to treat Amazon mildly in order to demonstrate that they are not being inappropriately swayed by the president."

Another silver lining, King said, is that even the possibility that there was a political motive for giving JEDI to Microsoft, in fact, "can give weight to the effort that AWS can make to reverse or appeal the contract awarded to Microsoft."


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