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Five to compete for $10bn cloud work after Pentagon scraps Microsoft project

John Sherman DoD CIO.jpg

Google, Oracle and IBM are likely to compete with both Amazon and Microsoft for a new multibillion dollar cloud contract that the Pentagon will be awarding.

The US Department of Defense (DoD) yesterday cancelled a controversial contract it had awarded to Microsoft in 2019, after – it is believed – then-president Donald Trump blocked Amazon Web Services (AWS).

The DoD has now cancelled that contract, put at US$10 billion, which was named Joint Enterprise Defense Infrastructure (JEDI) Cloud.

The Pentagon has replaced it with the less pronounceable new Joint Warfighter Cloud Capability (JWCC), and opened it up to a number of cloud providers, which will use their own data centres for the service – taking a similar stance to commercial cloud customers, by showing willing to divide work up between providers.

The Pentagon said in a statement to media: “With the shifting technology environment, it has become clear that the JEDI Cloud contract, which has long been delayed, no longer meets the requirements to fill the DoD’s capability gaps.”

The Reuters news agency said the Pentagon hopes to have the first awards by April 2022, quoting John Sherman (pictured), acting chief information officer at the DoD. However, Sherman refused to confirm the $10 billion estimate for the value of the cloud project.

He said the Pentagon will carry out “additional market research” before mid-October to “enable us to be able to engage those vendors directly to ensure that our market research is as thorough as possible”.

The Pentagon’s Cloud Computing Program Office will manage the project, assigning contracts directly to contractors, without going through a systems integrator. Sherman said procurement is likely to begin in 2025.

He suggested that Microsoft could submit a termination bid to recover costs of the scrapped project.

Reuters also quoted Microsoft saying that it was confident it will “continue to be successful as the DoD selects partners for new work”.

Amazon said it looks “forward to continuing to support the DoD’s modernisation efforts and building solutions that help accomplish their critical missions”.