IBM, Oracle JEDI bids weighed, measured and found wanting: Amazon, Microsoft last standing in Pentagon cloud race Oracle and IBM are out of the running for the Pentagon's $10bn cloud contract after a departmental probe found no evidence a conflict of interest had affected the deal. This comes after the Department of Defense (DoD) vowed to probe itself regarding the contract while a judge in a Big Red lawsuit against the deal froze Oracle' …
Doesn't surprise me they would claim they got screwed. It's too big a contract to walk away from. So the lawsuits are attempt to rewrite the bid documents. Whether it flies depends on the bid documents but since it is not a sole source I would tend to say the bid documents are fair as there would only be a few players to begin with.
Yes, although I believe they were discounted due to being uncompetitive and then attempted legal challenges rather than being ruled ineligible immediately.
Effectively, Oracle and IBM's main issue with the proposed contract was how much they could charge and how quickly they could deliver. Two of the vendors (AWS and Azure) have facilities in the correct geographic regions so do not have to acquire and build new facilities.
The "old way" of winning government contracts was to gouge early and deep and promise to deliver the savings in the distant future. Oracle and IBM followed this well worn path.
I believe IBM/Oracle were committing to service delivery within two years (in a 10 year contract) with significant upfront investment paid for by the government as part of the contract, while AWS/Azure would deliver services within the first year with much lower upfront costs (i.e. no acquisitions to deliver the initial services or time to build out new facilities as the already have GovCloud facilities in key locations like Virginia/southern states/western states).
Given Jedi is supposed to deliver savings and one of the big savings will be moving data from old expensive facilities (some of which are run by Oracle and IBM) to the eventual winner, Oracle/IBM stand to lose out on both existing and future government business. This battle has been building for a number of years as AWS/Azure/Google have won smaller contracts to supply systems to the DoD.
Is this fair? I haven't seen the Jedi contracts but then again I am not a lawyer so it would likely make little difference. The DoD have been trying to consolidate their environment for 10+ years and have found existing suppliers to be difficult to work with when attempting to achieve any short-to-medium cost savings from consolidation and many of the long term cost savings never seem to materialise.
Some of the "fairness" may be a reflection of the frustration that the DoD has had upto this point.
I'm not sure it's that straightforward.
In the big picture, my guess is that AWS/Azure will get around $2-3bn/year of DoD spend by 2025 out of $20bn/year. As Azure will get a lot of this from O365 services, the DoD have to be careful they don't end up with one vendor by giving away too much of the general purpose capabilities to MS.
The DoD would have also preferred Google to have remained in the running as well, as they do have some existing DoD facilities, but Google seem to have turned into a bunch of peaceniks...
I'm not sure Google turned into peaceniks so much as they didn't want to spend the money in the short term to do everything the JEDI contract would require them to do so. AWS has spent a lot of money in the run up to have nearly everything in place for the JEDI contract so they can hit the ground running. Azure is behind, but not that far behind, AWS in the run up. Everyone else is very far behind and wouldn't be able to go hit the ground crawling, much less walking or running.
The classic evil bias is playing a bad role here. Oracle and IBM are perceived as evil and since they are fighting the deal, people tend to ignore the worst aspect of the deal. The rule forbidding smaller companies to provide a joint offer is a dangerous precedent that together with the current lax approach of the anti-trust authorities will further strengthen the current monopolies, maybe a good news for big business, but not for everyone else.
"The classic evil bias is playing a bad role here"
No - the classic "screw the government hard" philosophy of some (most?) of the DoD's existing supplier base has meant they would like to kill off the old and infirm. Particularly if the old and infirm keep tightening their existing licensing nooses or stripping existing hosting contracts to the bone and ignoring customer complaints.
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