CNBC believes that this result indicates that Microsoft’s Azure cloud service is becoming a challenger to AWS.
After more than a year, the Pentagon’s 10 billion cloud computing orders finally confirmed the supplier, and Microsoft became the final winner. After the announcement, Microsoft shares rose 3% after the last trading day, while Amazon fell less than 1%.
This contract is the Joint Enterprise Defense Infrastructure Cloud (JEDI) project, which is Building a cloud computing system for the US military that allows the military to Better access to data on the battlefield or in remote areas to improve their combat capabilities. The contract is worth $10 billion and has a 10-year maturity, which is the largest order in the cloud computing market to date.
In this competition, Google, Oracle, and IBM have already been out, and the final competition is between Microsoft and Amazon. The two are also the giants of the global cloud computing Top 2. Early Amazon was considered to have potential, and in 2013 Amazon AWS business won a contract with the US Central Intelligence Agency (CIA). Amazon has passed the certification of the highest security license level available, and Microsoft is trying to catch up. But the end result is that Microsoft won the order. The Amazon cloud service issued a statement saying that Amazon was surprised by the decision.
CNBC believes that this result indicates that Microsoft’s Azure cloud service is becoming a challenger to AWS.
At present, both cloud business growth has slowed significantly. Who can win the Pentagon’s orders is very important for its business growth. Microsoft’s Azure business has a 59% growth rate in the latest quarter, which is a new low for at least three years. Amazon’s AWS’s 35% growth rate in the latest quarter also reached the lowest growth rate since data disclosure in 2015.
According to CNBC, Wedbush analyst Dan Ives even believes that the deal has the meaning of “game changer” in Microsoft’s cloud computing business, which will “produce the Microsoft cloud business in the next few years.” chain reaction”.
Analyst Beth Kindig had previously predicted that Microsoft was the most likely to win, because security is the most important issue for the Pentagon. Microsoft has previously cooperated with the Pentagon in software. If Amazon is chosen for cloud computing, the Pentagon still has to cooperate with Microsoft in security, and technically needs to connect two suppliers. If the Pentagon wants a provider of end-to-end cloud computing, software, operating systems and edge computing software such as Azure Sphere, then Microsoft is the best choice.
As early as 2016Microsoft won a five-year contract to provide technical support to the Defense Information Systems Agency (DISA). In November 2018, the US government received a $480 million contract to provide the military with 100,000 Augmented Reality Helmets. This two-year contract will help soldiers prepare for combat training.
In addition, it is worth mentioning that US President Trump’s attitude towards Amazon and his CEO Bezos is not friendly. Bezos owns the Washington Post, and Trump often criticizes the newspaper’s coverage of its government. Trump also attacked the company for tax evasion and unfair competition. In the Pentagon’s tens of billions of orders, Trump also criticized Amazon, saying that the contract did not have competitive bidding, and other companies complained that some terms favored Amazon.
However, Dan Ives expects Amazon to question the verdict in court, but Microsoft will win. Reuters also quoted a person familiar with the matter that AWS is considering a plan to protest the ruling.