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Amazon decided on dispute with Pentagon regarding a $ 10 billion contract

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Amazon decided on dispute with Pentagon regarding a $ 10 billion contract
November 15
13:00 2019

The U.S. Department of Defense has decided to create a cloud infrastructure for data storage; the cost of such development is 10 billion US dollars. Amazon was supposed to win the tender, but the Pentagon decided to give a 10-year contract to Microsoft. Amazon’s representatives are going to challenge the decision of the security forces in court.

The Pentagon’s project is called JEDI. Its essence is to modernize the technological component of the Ministry of Defense by moving huge amounts of information from physical servers to “the cloud”. No one doubted that Amazon would receive the contract, since it was the CIA that used its services in due time.

Contrary to market expectations, a month ago the Pentagon announced its decision to rely on a massive reorganization of Microsoft and its Azure cloud service.

Amazon issued a press release on this occasion, which stated that only Amazon had the experience and qualifications sufficient to implement a large-scale project. The report also mentioned that the tender was biased, with a large number of shortcomings and errors. Representatives of the company insist on checking the process of selecting a contractor. In addition to Microsoft and Amazon, Oracle Corp. and IBM Corp. participated in the tender. Both companies noted that the selection process was illogical.

By the way, U.S. President Donald Trump is constantly in conflict with Jeff Bezos, which is why many people explain the failed contract as Trump’s intervention. For example, the authoritative newspaper The Washington Post writes about this. But do not forget that the publication belongs to the head of Amazon and often criticizes the current president of the United States.

Due to the news, Amazon shares have increased 0.2%, Microsoft shares have grown 0.5%.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company
UFT Group

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