The JEDI cloud contract awarded to MSFT is being challenged by AMZN. It is a $10B contract over 10 years, which would represent less than 1% of revenue to MSFT. However, there is upside to this in that the contract might position MSFT to win more government cloud spending in the future.
Amazon Gets Injunction Blocking Microsoft’s Pentagon Cloud Contract
A judge orders a temporary halt requested by Amazon for the $10 billion contract that was granted to Microsoft.
By Tony Owusu
A judge has granted Amazon.com an injunction in which the company was seeking to block a $10 billion contract the Pentagon awarded to rival Microsoft to build the cloud infrastructure for the military’s computer systems.
A court notice announcing the injunction was filed on Thursday, but wasn’t public, CNBC reported.
The ruling would temporarily halt work on the Joint Enterprise Defense Infrastructure project.
Amazon last week filed a motion to depose President Donald Trump, Defense Secretary Mark Esper and former Defense Secretary James Mattis over the decision to award the contract to Microsoft.
Trump has been a vocal critic of Amazon CEO Jeff Bezos and the company seeks to make sure that personal animosity didn’t play a role in awarding the contract to Microsoft.
Amazon alleges that Trump wanted to "harm his perceived political enemy" – Bezos – in exerting pressure to block Amazon from the deal. Trump has often criticized Bezos because he owns the Washington Post, which editorially has been critical of the president.
According to reports, Trump delayed awarding the contract in 2018 after receiving complaints about internal favoritism toward Amazon.
Oracle CEO Safra Catz reportedly complained to Trump about the issue at a private dinner in April 2018, according to a Bloomberg report at the time.
Amazon’s cloud business, AWS, is the market leader in cloud computing, but Microsoft’s Azure cloud company has closed the gap between the two companies in recent quarters.
This article was originally published by TheStreet.
-0- Feb/13/2020 19:42 GMT
Sarah Kanwal
Equity Analyst, Director
Direct: 617.226.0022
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square, Suite 500
Boston, MA 02109
$MSFT.US
[tag MSFT]
[category equity research]