Microsoft's $10 billion Pentagon contract win changes everything in the cloud wars with Amazon. Here's what you need to know. (MSFT, AMZN)

Satya Nadella and Jeff Bezos

Last week, the Pentagon sent a shockwave through the cloud computing world with the surprise announcement that Microsoft had won the $10 billion Joint Defense Enterprise Infrastructure (JEDI) contract in a huge upset over Amazon Web Services. 

This came as a shock to basically everybody: Amazon Web Services was long the favorite to win, mainly for the very good reasons that it’s bigger than everybody else, has a higher security clearance than anybody else, and already had a $600 million deal with the CIA. Going in, everyone thought that Microsoft winning this deal would be like if the Washington Nationals won the World Series (hey, wait). 

The shadow of politics looms large over the JEDI contract award, too, thanks in large part to President Donald Trump and his beef with Jeff Bezos, Amazon’s CEO and owner of the Washington Post. Trump reportedly wanted the deal “scuttled,” and is said to have ordered former Defense Secretary James Mattis to “screw Amazon” out of the contract.

Now, the deal is done, but the saga of JEDI is not yet over. There are two questions on everybody’s mind: How did this happen? And: What happens next? 

Here’s a roundup of Business Insider’s reporting on the aftermath of JEDI, the complicated political circumstances around it, and what could come next:

  • Trump’s reported attempts to personally intervene in the JEDI award process could give Amazon all the ammunition it needs to fight back against Microsoft. 
  • At the same time, experts tell Business Insider that the Trump factor may have been overrated in the JEDI conversation, and there’s every reason to believe that Microsoft won the deal on its own merit. 
  • That’s a “wake-up call” for Amazon, experts say, because it means that it has to acknowledge for the first time that Microsoft is playing at its level in cloud computing. 
  • And for Microsoft, it’s a reassuring sign that it’s on the right track, but it might still has a lot of work to do before it can actually fulfill the terms of the JEDI contract.
  • A surprise winner in all of this? Oracle, which failed at its attempt to derail the JEDI process with a series of protests and legal challenges against Amazon, but which succeeded in slowing things down enough for Microsoft to get its act together and win. And because Microsoft and Oracle are now cloud partners, it can still benefit.

As of the time of writing, Amazon hasn’t taken any action in the wake of the JEDI decision — last we heard, it was keeping its options open. But Business Insider is keeping its eyes and ears open. And if you want us to know anything about the JEDI deal and the aftermath, here’s how to send us a tip.

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