UPDATED 23:54 EDT / APRIL 12 2018

CLOUD

Amazon rivals, led by Oracle, call for multiple bidders to land lucrative Pentagon cloud contract

The scramble among cloud computing giants to land an extremely lucrative contract from the U.S. Defense Department is becoming more complicated and controversial by the day.

The Pentagon on Thursday said it would soon release a revised list of requirements for the decade-long contract, which could be worth up to $10 billion for the company that secures it. However, Pentagon officials are reportedly refusing to give in on a key demand of many of those bidding for the contract, which is that it intends to award the contract to a single company only, the Wall Street Journal reported.

The Pentagon’s insistence on a single provider is, of course, a big problem for the likes of Oracle Corp., Google LLC and Microsoft Corp. These companies have previously raised concerns that DoD has shown favoritism toward Amazon Web Services Inc.

The Defense Department’s pending cloud contract, known as the “Joint Enterprise Defense Infrastructure” project, will likely be its most expensive award yet. The department, which has already issued a draft request for proposals from cloud companies to host sensitive and classified information, is expected to announce the winner sometime later this year.

The winner is widely expected to be Amazon, which has already secured a $600 million cloud contract with the Central Intelligence Agency.

The website Axios reported that rivals have expressed that the Pentagon’s draft request for proposals shows a clear bias toward Amazon. One of the reasons behind this thinking is that the Pentagon recently said it had chosen a company called Rean Cloud LLC to prepare its systems for the upcoming cloud migration. Rean Cloud is known to be very close to Amazon, and is also an official “premier consulting partner” in the AWS Partner Network.

Oracle publicly voiced its concerns over the Rean Cloud deal, saying it was a clear indication that the Pentagon favored AWS for its larger contract. The software giant later filed a legal challenge to the award. Pentagon officials responded by slashing the value of that contract from $950 million to just $65 million, while putting limits on the scope of the work, to try to alleviate Oracle’s concerns.

Even so, the move has seemingly failed to appease Oracle and Amazon’s other main rivals, Google and Microsoft, all of which have been lobbying hard for a piece of the action.

Just last week, Oracle co-Chief Executive Safra Catz met with U.S. President Donald Trump to voice her concerns over the alleged bias. Trump reportedly responded that he wanted the process to be “fair” but declined to say he would intervene in the process. Bloomberg reported Friday that according to three unnamed sources, Oracle is leading the anti-Amazon campaign with a “loose coalition” that includes Microsoft, IBM Corp., Dell Technologies Inc. and Hewlett Packard Enterprise Co.

Meanwhile, Google has reportedly been maneuvering behind the scenes as well. A report in DefenseOne Thursday claimed Google secretly pitched Defense Secretary Jim Mattis on its cloud computing capabilities and its accompanying artificial intelligence ambitions. Mattis reportedly met with Google founder Sergey Brin and Chief Executive Officer Sundar Pichai and came away convinced that the “U.S. military had to move much of its data to a commercial cloud provider.”

Microsoft issued a public statement saying it believes the best strategy would be for the Pentagon to split the contract to leverage “the innovations of multiple cloud service providers.”

Separately, independent experts have also called for the Pentagon to consider adopting a multicloud approach. “Because the DoD is so big and has so many different unique areas of responsibility and missions, the optimal set of options would be found by awarding one contract to multiple vendors,” Trey Hodgkins, senior vice president for the public sector at the Information Technology Industry Council, told Axios.

Holger Mueller, principal analyst and vice president of Constellation Research Inc., told SiliconANGLE that he too thought the Pentagon should consider multiple cloud providers.

“We are in the early days of the cloud being used for advanced defense purposes, with AI at the forefront,” Mueller said. “Given the strategic importance, it is key for defense agencies to adopt a multicloud strategy, not only for the benefits of redundancy and resilience but also to be in a better commercial situation in a few years.”

It’s not clear if the Pentagon is willing to heed such calls, however. According to Axios, one industry executive said the Pentagon’s main wish is to “make sure the department and services meet their mission requirements,” and that this takes precedence over any arguments in favor of awarding the contract to multiple bidders.

Image: 12019/Pixabay

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