Amazon lost a major government contract to its rival Microsoft—and it’s pretty pissed about it.
The megacorp plans to challenge the Pentagon’s October decision to award its $10 billion cloud-computing contract to Microsoft. The plan seeks to modernize the military’s IT operations, consolidating the vast majority of its war systems into a system called JEDI. IBM and Oracle were also being considered for the contract; the former launched a legal challenge days before contract bids were due, while the latter is launching its third legal challenge last week.
But Amazon's protest, filed on Thursday, claims the decision was made for political reasons. Drew Herdener, an Amazon spokesman, said in a statement:
It’s critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence. Numerous aspects of the JEDI evaluation process contained clear deficiencies, errors, and unmistakable bias—and it’s important that these matters be examined and rectified.
In July, President Trump “very seriously” considering intervening on Microsoft’s behalf. This, in part, led to a Pentagon media briefing that attempted to offer assurances of objectivity. For years, Trump has publicly badgered Amazon CEO and Washington Post owner Jeff Bezos on Twitter.
Officials insisted it was Chinese tech companies, not the President’s comments about intervening, that were the real threat here. Lt. Gen. John Shanahan, head of the Pentagon's Joint Artificial Intelligence Center, insisted that "our adversaries are moving ahead at their own pace, whether it's with Alibaba, Baidu, or Tencent.”
In late October, a book by a former staff member of Pentagon Chief Jim Mattis claimed Trump wanted to "screw Amazon" out of the JEDI contract. Amazon’s fall from grace was also accelerated by a series of scandals, political interventions, and growing competitor backlash which increasingly pushed the company out of favor despite its dominance of the cloud computing industry.
“We’re surprised about this conclusion,” an AWS spokesperson said at the time. “AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion.”
Research firm Gartner pegs Amazon Web Service's cloud-computing market share at 48 percent, with Microsoft Azure lagging behind at 15.5 percent. AWS also remains the only company to hold the Pentagon’s highest security clearance classification, known as Impact Level 6. Microsoft's victory could have the potential to not only hasten its acquisition of Impact Level 6, but add momentum to its ascension as a serious alternative to Amazon and as the preferred choice for government contracts.
Despite all this corporate fighting, JEDI remains controversial. Microsoft workers have organized to protest the project, only to have their dissent mostly ignored. The Pentagon has also struggled to convincingly explain key details surrounding the JEDI project, or why JEDI is actually needed.
Amazon’s protest, then, is particularly rich given the fact that it is constantly the subject of protests that the company usually ignores. Amazon has seen protests for its facial recognition surveillance tech, warehouse working conditions, its carbon footprint, a paltry climate pledge, pretty much every part of its delivery infrastructure, a cozy relationship with ICE, and more.
If it won’t listen to those, then it’s not clear why the company should get to turn around and cry foul. And if it can’t or won’t listen to and address those legitimate concerns, then maybe Amazon should be forcibly realigned to the public interest and, dare I say it, nationalized.