When the Pentagon pulled the plug in the $10 Billion cloud deal, it raised concerns about how large IT contracts could be managed moving forward.
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An ongoing legal challenge from AWS may have caused the termination of the Joint Enterprise Defense Infrastructure contract (JEDI), awarded to Microsoft by The Department of Defense. This could impact how IT deals in the future.
The Pentagon decided to end the JEDI contract early in July, rather than continuing with long-running litigation. The Pentagon decided to end the JEDI contract in July, citing questions about how major contracts are distributed and whether it makes sense for one vendor provider to remain with the multi-cloud environment.
” The issue was the length and amount of the contract,” said Tracy Woo, senior analyst at Forrester. In most cases, there is no legal battle that holds up contracts. However, it could happen in larger contracts with huge amounts of money at stake.
The legal quagmire which hampered JEDI for nearly two years could have influenced recent decisions by other government agencies on their IT strategy. Woo said. Due to the delay with JEDI , the CIA is already working to create its own multi-cloud contract.
When Microsoft won the $10 trillion JEDI contract in 2019 for updating IT infrastructure for the military, and related services using cloud computing resources, AWS raised objections. Oracle had complained about the contract even before that. This was back in the days when AWS looked poised to win everything. Woo states that Oracle was the first to file a lawsuit. They didn’t really have any legs, but they were the main provider of on-premises services for the government. They were the ones who had to help with the migration to cloud .”
There was a presumption AWS would win JEDI, she said, adding that this contributed to the uproar when it didn’t. Woo states that AWS was the only company to have the IL6 clearance (Impact Level 6) authorization. This refers to federal authorization to handle classified information designated as SECRET. She says that Microsoft did not have it yet. “They were able get provisional clearance, and somehow they were in a position to swoop into AWS .”
The complaint from AWS was prompted by very public disagreements between Jeff Bezos (now Amazon’s executive chairman) and the former White House administration. Andy Jassy was the CEO of AWS, and is now the CEO of parent Amazon. He previously made no concessions when he called out the unfairness of the contract award. Similar sentiments were also shared outside AWS.
” There was an obvious bias in what was being awarded, and why it went one company over the other,” Woo states.
Although the deal has been terminated, questions remain about the JEDI contract. It was designed to allow one vendor to provide the full range of cloud computing overhauls needed for 10 military years. Woo states that it is a valuable lesson for government. It should teach them to be more vendor-agnostic and not to create an incendiary and exclusive contract .”
There was disdain she said that the JEDI contract wasn’t multi-cloud but not for the sake of including more vendors. Woo states that this is a highly regulated industry [space], with many compliance issues. “There must be a lot redundancy and a lot availability. It was not logical to rely on one cloud provider for all functions
These lessons are starting to sink in — to a degree. The Department of Defense also announced the Joint Warfighter Cloud Capability project (JWCC), which will be multi-cloud and multivendor. Although JWCC opened up possibilities for other vendors, the Pentagon still listed Microsoft and AWS among the vendors that have cloud services that met their needs.
It is a step in a positive direction, Woo states, to be more vendor-agnostic and not favor one company, as well as to not make the terms of the deal so exclusive. She says that ten billion dollars for 10 year is a huge deal for any company. Other vendors could be eligible to compete by reducing the JWCC deal size and extending the term to five years. Woo states that there are still many people trying to get into public cloud.
Cloud providers may find it beneficial, if not essential, to work together to secure large multi-cloud government contracts. Woo states that cloud providers will need to be more friendly with one another. AWS did not initially acknowledge other cloud providers. They wouldn’t acknowledge other environments .”
AWS Outposts offers AWS infrastructure and services at-prem. VMware Cloud on AWS brings VMware’s data centre software to AWS. Microsoft is also opening up its Azure Stack service, which allows Azure to be extended to any environment that the user chooses. Woo said, “All this is in the name to be more useful and present to more people.”
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Joao Pierre S. Ruth spent his entire career in technology and business journalism. He was first a journalist covering New Jersey’s local industries, then he became the New York editor of Xconomy, focusing on the city’s startup scene…. View Full Biography
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