Washington, Dec 7 Amazon, Google, Microsoft and Oracle won a multi-billion dollar cloud services contract with the US Department of Defense that could be worth $9,000 million to each company by 2028, according to the country’s media.
The Pentagon announced in a statement this Wednesday that with this joint contract it will receive cloud services at market prices or even better and “an optimized supply.”
The Department of Defense has thus chosen to rely on multiple suppliers rather than a single company, as advocated during the administration of former President Donald Trump (2017–2021).
In fact, the Pentagon revised its previous strategy to ask several companies to offer their proposals for cloud services in July 2021 after canceling a contract with Microsoft that put it in court with Amazon.
With this project, the Pentagon wants to create a large cloud-based operating system for the US Armed Forces, while leveraging the technical capabilities of private providers to create new applications on the battlefield.
The initiative began when Jim Mattis was defense secretary during the Trump administration, who hoped the project would serve as a springboard for the Pentagon’s adoption of artificial intelligence to compete with China.
However, the contract failed due to the Department of Defense’s insistence that it be awarded to a single company rather than multiple companies.
Firms such as Oracle and IBM protested even before it was awarded to Microsoft, arguing that such an approach went against good business practice.
Until the award was announced to Microsoft in late October 2019, the main favorite to win it was Amazon.
Amazon blamed the government, and Trump in particular — who didn’t get along with its then-CEO Jeff Bezos — made a political decision and filed suit.
The importance of this contract goes beyond its economic value – the largest in the Pentagon’s history in the technology sector – because it is seen as a pioneer and others like other government agencies can follow.