AWS and Microsoft fight it out as the last JEDI contenders

Oracle and IBM snubbed as Pentagon selects final two cloud providers for $10bn project

The Pentagon

Amazon Web Services (AWS) and Microsoft have been selected to continue competing for the Pentagon's cloud computing contract, the US Department of Defence said on Wednesday.

The highly sought after Joint Enterprise Defense Infrastructure (JEDI) contract is worth $10 billion and is part of a broad modernisation of Pentagon information technology systems that could take up to 10 years.

"I can confirm that AWS (Amazon Web Services) and Microsoft are the companies that met the minimum requirements outlined," department spokeswoman Elissa Smith said in a statement to Reuters.

AWS, Microsoft, IBM and Oracle have been the front runners for the contract for a while, particularly after Google pulled out in October 2018, citing a clash of ethical values. But this latest decision is a snub to both IBM and Oracle.

Oracle has stayed in contention for the contract, despite repeatedly opposing its single-vendor specifications. In December, the cloud and database business launched a second bout of legal proceedings over the contract, filing a suit against the Department of Defence in the US Court of Federal Claims. The company's original legal action was dismissed by the Government Accountability Office (GAO).

Oracle questioned the "propriety" of the procurement process after obtaining communications in which an official called colleagues voicing support for AWS rivals "dum-dums." The tech giant alleged that two people who helped lead the JEDI project, Deap Ubhi, who served as JEDI project manager at the DoD, and Anthony DeMartino, chief of staff for the Deputy Secretary of Defense, were conflicted because of their relationship with AWS.

Ubhi, the lawsuit states, worked at AWS until joining the Defense Digital Service in the summer of 2016. He returned to AWS as general manager in November 2017.

The GAO has always maintained that the single vendor approach does not violate any laws and that for issues of national security the process is in the government's best interests. IBM issued a similar legal challenge against the single-vendor process, which is said to violate procurement regulations, but that case was also blocked.

But with IBM and Oracle out of the picture, it falls to two of the industry's biggest cloud providers, Microsoft and AWS, to battle it out.

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