The US Defense Department announced on Tuesday that former President Donald Trump’s $10 billion cloud computing JEDI project, which had been awarded to Microsoft, had been cancelled. It announced that the field would be opened up to other players, including Amazon, the world’s largest cloud computing company.
The move comes after the Bide administration stated that the project would most likely be divided among several companies, in contrast to Trump’s policies, which favoured a single provider.
What’s the big deal about this?
Software companies have been attempting to persuade the government and businesses that shifting computing work to their data centres was a safe move. They’ve presented a number of studies to back up their claim that cloud computing is secure.
Obtaining a contract with the US military by meeting all of their security requirements will serve as a stamp of approval that will influence other businesses.
The Joint Enterprise Defense Infrastructure Cloud (JEDI) was part of a larger Pentagon digital modernization effort aimed at making it more technologically agile.
Despite competing bids from Amazon, IBM, and Oracle, Trump awarded the contract to Microsoft. Former US President Barack Obama had publicly chastised Amazon founder Jeff Bezos, claiming that he was reviewing the company’s bid after receiving complaints from other parties.
After Amazon filed a lawsuit challenging the decision, the contract was put on hold. According to the company, Trump put undue pressure on military officials in order to steer the contract away from Amazon.
What does Microsoft’s latest decision mean?
According to experts, Microsoft may benefit from the cancellation and new contract because it has had nearly two years to invest in its technology during the legal wrangling.
“If another competitor emerges, Microsoft will be in a stronger position,” Mark Moerdler, a senior research analyst at Bernstein, told Reuters.
Meanwhile, Microsoft said in a statement that it is confident it will “continue to be successful as the Department of Defense selects partners for new work.” According to Sherman, Microsoft could submit a termination bid to recoup the costs of the scrapped project.
The cancellation of the deal has also been welcomed by Amazon.
