Microsoft just scored a huge upset over Amazon by winning the fierce battle over the $10 billion JEDI contract (MSFT, AMZN)

Satya Nadella

  • On Friday, Microsoft won the $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract over Amazon, which was thought to be the frontrunner.
  • Microsoft and Amazon had been competing for this key Pentagon contract for over a year, and President Donald Trump reportedly said he would get involved after complaints about the bidding process.
  • IBM and Oracle, which were eliminated from the race, had previously filed protests about the JEDI bidding process.
  • An Amazon Web Services spokesperson says the company is “surprised about this conclusion.”
  • Read more on the Business Insider homepage.

Microsoft was officially awarded a $10 billion cloud contract with the Pentagon on Friday — marking a big victory over Amazon, which was thought to be the frontrunner for the deal.

This contract, called the Joint Enterprise Defense Infrastructure (JEDI) contract, is a 10-year contract to help the Department of Defense move its sensitive data to the cloud. Companies like IBM, and Oracle also competed for the contract since the bidding process opened up in July. In April, IBM and Oracle were eliminated from the race.

Previously, President Donald Trump reportedly wanted to “scuttle” the bidding process for JEDI. Trump had demanded more information about JEDI after hearing about complaints on the bidding process, and he promised to look into the deal after receiving letters on the matter from lawmakers, including Sen. Marco Rubio.

“The National Defense Strategy dictates that we must improve the speed and effectiveness with which we develop and deploy modernized technical capabilities to our women and men in uniform,” DOD Chief Information Officer Dana Deasy said in a statement. “The DOD Digital Modernization Strategy was created to support this imperative. This award is an important step in execution of the Digital Modernization Strategy.” 

Industry analysts predicted that Amazon Web Services was the frontrunner to win the contract, although others have said that Microsoft Azure has grown quickly as well and invested significant resources in improving its government cloud.

“We’re surprised about this conclusion,” an AWS spokesperson said. “AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion. We remain deeply committed to continuing to innovate for the new digital battlefield where security, efficiency, resiliency, and scalability of resources can be the difference between success and failure.”

Although analysts saw the bid as a two-horse race, the competition was still fierce, to the point that even an anti-Amazon smear campaign spread around Washington, D.C.

Oracle and IBM also filed official protests about the contract, and Oracle filed a lawsuit saying that Amazon was favored to win JEDI and had conflicts of interest in the process.

Missing from the bid is Google, which dropped out of the bid last October.

Business Insider has reached out to Microsoft for comment.

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