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Amazon will question Microsoft's Pentagon JEDI cloud contract



Jeff Bezos at New York Economic Club's lunch on October 27, 2016 in New York.

Adam Jeffery | CNBC

Amazon announced Thursday that it has filed a notice with the US Federal Court of Justice outlining a plan to protest the Pentagon's decision to grant Microsoft a controversial contract for cloud computing services The contract, which spans over 10 years and could cost up to $ 10 billion, was completed on October 25. He was originally to be awarded last year. The Wall Street Journal reported on Amazon's protest plans on Thursday.

The deal is a big win for Microsoft under CEO Satya Nadella, who has given cloud services a higher priority. For Amazon it would be smaller; The Amazon Web Services business generated $ 9 billion in revenue in the last quarter.

"Many aspects of the JEDI assessment process contained clear deficiencies, errors and unambiguous deviations ̵

1; and it is important that these aspects are examined and corrected." CNBC said in an email.

A Pentagon official said he would not speculate about possible litigation. Microsoft did not immediately respond to requests for comments.

In August, the Pentagon announced that Esper would review the JEDI deal after President Donald Trump announced that he had received complaints from companies about the lawsuit. Trump said in July that companies said, according to Bloomberg, that the terms of the contract favored Amazon.

Read more: Trump says he is considering a Pentagon cloud contract

"I never had anything where more people complain," Trump told the White House last month. "Some of the largest companies in the world complain about it," he added, naming Microsoft, Oracle and IBM.

The lucrative contract, which was originally to be awarded in September 2018, was postponed until Defense Secretary Mark Esper concluded the contract with a series of thorough reviews of the technology.

"We need to do it right so we do not rush to a decision, we'll spend a lot of time the evaluation team has to spend to make sure we choose the best technical solution at the right price with the right criteria" Dana Deasy, Pentagon Chief Information Officer, told reporters at a closed media round table at the Pentagon.

"We have no entrepreneurial approach," added Deasy. "We have a number of isolated solutions that we've developed, we have a lot of vendors that we use for cloud solutions, but we've never stepped down and developed a holistic solution, and that presents us with major challenges."

] Microsoft does not state how much revenue it achieves with Azure, but its growth rate of 59% in the third quarter exceeded AWS 'growth rate of 35%.

– CNBCs Ylan Mui contributed to this report.

CLOCK: President Trump: We'll take a closer look at the Amazon Agreement with Pentagon


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