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Court snubs Microsoft, US govt's request to throw out Amazon's complaint against JEDI cloud contract decision

Anonymous Coward
Anonymous Coward

"Amazon has been crying in their beer because they tried to buy the contract at the wrong level"

I'm not sure it is just Amazon that are crying here - current rumours are that JEDI will be superseded by a new tender as there is no way that the current JEDI contract can deliver savings given the blow out in cloud service usage over the last 2 years and that awarding the contract to Microsoft has meant that the DoD now has a huge dependency on one supplier as O365/other contracts were awarded to them already.

So who does win?

- IBM/Oracle/other legacy data centre operators won by getting another 3-5 years life out of their DoD contracts - Oracle in particular were sitting on a significant cloud investment that could have become a large loss. While they may have been able to wind down their investments, the DoD will still likely reduce the number of vendors so its still a partial loss.

- while AWS have currently lost the contract, they are likely being paid more for legacy services (and growth in those services) than they would have got under the new consolidated contract. It was believed that JEDI would flatten DoD revenue for 2-3 years at around $600m per annum.

- Microsoft may be doing the worst out of JEDI as it currently stands as they have made the $200m-$300m investment in new resilient data centres without getting the full benefit of the $10bn over 10 years of business. Yet. Or possible never. But they have existing government O365 in resilient facilities (something they had to deliver for DoD eventually) AND they will be on an even footing with AWS in future tenders versus being around 3 years behind AWS in terms of DoD-compliant facilities so it's not likely they do badly, they still get their cake, jst some of the icing is missing.

- DoD IT have lost out on attempting to keep their budget at around US$20bn per year for 2020-2025 and addressing legacy security issues in older facilities as quickly as they would have liked. In the longer term, it has likely lost the JEDI battle but won the war against some of the legacy vendors that have caused the huge increases in DoD IT budgets.

- US taxpayers. Congratulations! How much have you won? An additional $1-2bn per annum in DoD funding? Or is it more? Future numbers from the DoD will be revealing but with the push to cloud already happening and COVID likely delaying the decommissioning of legacy facilities, It wouldn't surprise me if the US$200-220bn the DoD expected to spend between 2020-2029 is now closer to US$300bn. But just think of all those DoD suppliers whose kids you have paid to send through college, who can now afford that third luxury car in their driveway and a winter AND summer holiday home. They're taxpayers too right? And maybe some of their wealth will trickle down...

- Lawyers. With the JEDI contract now ruined, what could have been a prosperous next 10 years will likely be curtailed as it's not in any ones interests to fight this. The AWS/DoD/Microsoft service love-in will continue and they will think of a better way to get the result they want - AWS/Microsoft were small players in the DoD IT budget and are replacing the legacy vendors who wouldn't play nice. Playing nice now means more of those DoD billions become yours and an actual fight between AWS/Microsoft can come later. When there's less alternatives.

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