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Pentagon hits reset on Trump's $10 billion cloud deal: All you need to know
The deal for the cloud computing project was awarded to Microsoft by former US president Donald Trump in 2019. Amazon filed a lawsuit challenging the decision, accusing the president of exerting improper pressure on military officials.
The United States defence department on Tuesday cancelled its $10 billion cloud computing JEDI project awarded to Microsoft by former president Donald Trump. It announced opening up the field to other players, including Amazon, the biggest cloud computing provider.
The move comes after the Bide administration said it would likely parcel out the project to multiple companies, a departure from Trump's policies, who favoured a single provider.
Why this is a big deal?
Software companies have been trying to persuade the government and businesses that it was safe to shift computing work into their data centers. They have presented various studies to prove the point that cloud computing is safe.
Grabbing the contract of US military by meeting all their security requirements will act as a stamp of approval to sway other companies.
The Joint Enterprise Defense Infrastructure Cloud (JEDI) was part of a broader digital modernisation of the Pentagon aimed at making it more technologically agile.
What happened in 2019?
Trump awarded the contract to Microsoft despite bids from technology titans like Amazon, IBM and Oracle. The former US President had taken public swipes at Amazon founder Jeff Bezos, saying he was reviewing the company's bid after complaints form other players.
The contract was put on hold after Amazon filed a lawsuit challenging the decision. The company claimed that Trump exerted improper pressure on military officials to steer the contract away from Amazon.
What does the latest decision mean for Microsoft?
Experts say the cancellation and new contract could benefit Microsoft because the company has had nearly two years during the legal wrangling to invest in its technology.
"If there is now another competition, Microsoft is going in from a better position," Mark Moerdler, a senior research analyst at Bernstein, told news agency Reuters.
Microsoft, meanwhile, said in a statement that the company was confident it will "continue to be successful as the DoD selects partners for new work". Microsoft could submit a termination bid to recover costs of the scrapped project, Sherman said.
Amazon too has welcomed the cancellation of the deal.
The Pentagon hopes to have the first awards by April 2022 for its new Joint Warfighter Cloud Capability (JWCC).
