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Amazon’s fight with Trump is about much more than $10bn

The Joint Enterprise Defense Infrastructure project would give the military a cloud computing system that could handle 3.4 million demanding users, many of whose lives depended on it working correctly.

Rather than share the responsibility between several companies – as the likes of Oracle and IBM had keenly hoped – the Department of Defense decided that this was to be a “winner takes all” contract. One project, one provider, $10bn (£7.6bn).

Experts considered it an opportunity beautifully “gift wrapped” for Amazon. Its Amazon Web Services (AWS) was already, by far, the biggest cloud platform in the world, entrusted with sensitive data belonging to millions of clients. Among them, the Central Intelligence Agency.

“We have no favourites,” insisted Timothy Van Name, from the Defense Digital Service, when hit with a barrage of criticism from the wider cloud industry. A court challenge would come from Oracle – the database firm – slowing progress, but the contract looked set to land in the lap of Jeff Bezos.

Except, it didn’t. Against expectations, the Department of Defense awarded the contract to Microsoft.

Now, Amazon is going head-to-head with the Trump administration, arguing that the President himself unfairly interfered with the selection process out of spite for Jeff Bezos due to his ownership of the Washington Post.

Future dominance

So far in 2019, AWS has generated $25bn in sales, generating more income for Amazon than it makes from retail in the whole of North America.

In that context, the Jedi contract – worth $10bn over 10 years – would be a meaningful but not critical entry on its balance sheet.

But what has Amazon so incensed is what the Pentagon’s decision might mean for future, similar contracts. Much like the firm had hoped its involvement with the CIA would give it a shoe-in for Jedi, it is thought that other US departments, also in need of modernisation, will follow the Pentagon’s lead…Read More


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