Amazon Has Plenty of Foes in Pentagon Cloud Deal
There are many more companies competing with Amazon for the big cloud computing contract Pentagon is looking to award than previously reported•Bloomberg has obtained emails that indicate SAP, General Dynamics, Red Hat, VMware, Dell, and Hewlett Packard Enterprise are among at least nine companies coordinating opposition to the government's plan to award the deal to a single provider•Oracle, Microsoft, and IBM are the anti-Amazon coalition's most active members
June 27, 2018
![The Pentagon The Pentagon](https://eu-images.contentstack.com/v3/assets/blt8eb3cdfc1fce5194/bltd0291e459e909dc3/6621072952b3bde31a881dc0/pentagon_20aerial_20right_20size.jpg?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
Naomi Nix (Bloomberg) -- The coalition of companies jockeying with Amazon.com Inc. for a lucrative Pentagon computing contract is far bigger than previously reported, signaling there’s added heft behind efforts to keep the work from going exclusively to the world’s largest cloud services provider.
SAP America, General Dynamics Corp.’s CSRA unit, Red Hat Inc. and VMware Inc. are among at least nine companies that have coordinated their opposition to the government awarding the contract to a single provider, according to emails obtained by Bloomberg News. Amazon, the market leader in cloud services, is widely perceived to be the front-runner.
The most active members of the coalition trying to fend off an Amazon win are Oracle Corp., Microsoft Corp., and International Business Machines Corp., according to two people familiar with the matter. Other companies involved include Dell Technologies Inc. and Hewlett Packard Enterprise Co., Bloomberg has reported.
SAP and the others aren’t considered top contenders for the contract, but the companies are banding together to fight the Pentagon’s plans to award it to a single bidder out of concern it could disrupt their established business model for obtaining military contracts.
Paused Process
The Pentagon announced a winner-take-all competition for the multibillion-dollar cloud services contract in March. It has since paused the bidding process for the project, which would transition massive amounts of Defense Department data to a commercially operated cloud system. The government has said it still plans to award the contract by September.
Representatives for SAP, Red Hat, CSRA and VMware declined to comment.
The widespread interest among technology companies in pressing the Pentagon to change its procurement approach indicates how important the outcome of the lucrative contract is for cloud providers that are struggling to catch up to Amazon as well as firms that sell software and other technology to federal agencies.
Bidding Conversations
Companies have begun conversations about jointly bidding for the contract known as Joint Enterprise Defense Infrastructure, or JEDI, according to two other people familiar with the discussions.
The Pentagon has tapped Dana Deasy to be its new chief information officer and is putting him in charge of overseeing the contract, a move that has been welcomed by members of the coalition, according to two other people familiar with their thinking.
“Dana Deasy is a highly professional, seasoned, transformational CIO who will lead the DoD’s technology efforts with distinction,” Oracle’s Senior Vice President Ken Glueck said in a statement.
Coalition members were pleased with Deasy’s comments before the House Oversight and Government Reform Committee in May, the people said. While he didn’t address the JEDI contract specifically, he talked about the importance of using multiple cloud providers.
Deasy previously worked as global chief information officer for JPMorgan Chase & Co. at a time when the company made major investments to transition to a public cloud. He held similar positions at the North American unit of General Motors Co., Tyco International and Siemens AG’s North American operation.
“Under Deasy’s leadership, the department will gradually consolidate its disparate networks, data centers and cloud efforts to manage them at the enterprise level,” Pentagon spokeswoman Heather Babb said in a statement Monday.
Advance Agenda
To advance their agenda, the tech allies have been strategizing by email and phone, courting trade and mainstream media and lobbying lawmakers, defense officials and the White House, Bloomberg has reported.
The competitive cloud coalition has notched some wins. The House committee in charge of federal spending approved a Defense Department funding bill this month that would halt funding for the contract until the Pentagon submits a strategy to sustain competition and use multiple cloud-service providers, representing the third attempt by lawmakers to influence the process. The full House is scheduled to take up the spending measure this week.
Read more about:
North AmericaAbout the Author
You May Also Like