Microsoft received a contract to provide cloud computing that could be worth as much as $9 billion.
The Joint Warfighting Cloud Capability, or JWCC, is aligned with the U.S. Defense Department’s strategy of relying on multiple providers of remotely operated infrastructure technology, rather than one company—a strategy promoted during the Trump Administration.
The Department of Defense’s Joint Warfare Contracting Center has four contracts worth $9 billion.
More and more businesses have turned to using multiple cloud providers. In some cases, they use a specialized service on one provider and the majority of their front-end and back-end workloads on another. Or, in other instances, it’s determined by cost: having multiple cloud providers means an organization is more confident they can withstand outages.
Microsoft’s Joint Enterprise Defense Infrastructure, or JEDI, was originally awarded by the Pentagon in 2019. This caught the attention of Amazon, who is a top player in the cloud infrastructure market. Oracle also challenged this decision.
There is no evidence to support the claim that the Trump Administration intervened in the awarding of the contract. The Pentagon’s watchdog conducted a review, and it ruled that there was no evidence. Months later, when Microsoft won the contract, the Pentagon announced it would continue working with them.
Previously, the Pentagon sought bids from Amazon, Google, Microsoft, and Oracle for its cloud needs, but last year it decided to choose between just Amazon and Microsoft. At the time, the General Services Administration said only Amazon and Microsoft seemed to be able to meet their requirements.
Wednesday’s victory highlights Oracle as one of the few companies in the leading tier for providing cloud-based computing services. Oracle generated $900 million in cloud infrastructure revenue on the quarter that ended Aug 31, a small fraction of Amazon Web Services’ $20.5 billion earnings from their third quarter.
All four of the technology companies have signed, indefinite delivery and indefinite quantity, or IDIQs, meaning they can service an indefinite amount of services for a specified time period.
The Department of Defense’s goal is to bring a better solution for all their needs. “The purpose of this contract is to provide the Department of Defense with enterprise-wide globally available cloud services across all security domains and classification levels, from the strategic level to the tactical edge,” the department said.
Correction: A prior version of this story said each company was awarded a contract of up to $9 billion, but that number represents the combined total for the four.