Pentagon announces new cloud initiative to replace ill-fated JEDI contract

Tech

The Pentagon announced a limited request for bids for a new cloud initiative today that replaces the cancelled $10 billion, decade-long JEDI contract initiative. You may recall (or not) that it previously ran a winner-take-all bid it had dubbed JEDI (short for Joint Enterprise Defense Infrastructure). The new initiative goes by the much less catchy name, Joint Warfighting Cloud Capability, or JWCC for short.

Under the terms of the RFP, Amazon, Microsoft, Google and Oracle have been invited to bid. That multi-vendor approach is markedly different from the JEDI RFP, where just a single vendor was going to walk away with the prize. In fact, the Pentagon makes clear that while it favors Amazon and Microsoft, any of the qualified (invited) vendors could get a piece of this deal.

As the RFP states, “The Government anticipates awarding two IDIQ contracts — one to Amazon Web Services, Inc. (AWS) and one to Microsoft Corporation (Microsoft) — but intends to award to all Cloud Service Providers (CSPs) that demonstrate the capability to meet DoD’s requirements.”

It appears it limited the number of vendors involved because after researching its requirements, the Pentagon found that there were a limited number of companies out there capable of meeting them. “Market research indicates that a limited number of sources are capable of meeting the Department’s requirements. Currently, the Department is aware of only five U.S.-based hyperscale CSPs (cloud service providers). Furthermore, only two of those hyperscale CSPs — AWS and Microsoft — appear to be capable of meeting all of the DoD’s requirements at this time, including providing cloud services at all levels of national security classification.”

The government is still working out the pricing for this one, but with multiple vendors involved, it’s entirely possible that it will exceed the $10 billion price tag of the now-defunct JEDI contract. “The Department is still evaluating the contract ceiling for this procurement, but anticipates that a multi-billion dollar ceiling will be required. The contract ordering ceiling will be included in any directed solicitations issued to vendors.”

It’s worth noting that each company that wins an award under the terms of the RFP will get a three-year contract for its piece, with two one-year option periods.

JEDI was mired in controversy from the start as top cloud vendors jockeyed for position, and lesser ones also tried to get into the act. There was much drama, complaints to the president, complaints from the president, complaints about presidential interference, formal inquiries galore and several lawsuits. In the end, in spite of everyone believing that Amazon would win the bid, it didn’t. Microsoft did.

But that wasn’t the end, and the two companies went to the mat over the decision, ending up in court, of course. Eventually the Pentagon tired of the whole thing and decided to scrap the project altogether.

That didn’t mean, however, that the military’s requirement to modernize its computing systems went away just because the contract did. That’s why today, the Pentagon announced the new initiative to push technology modernization involving cloud infrastructure back to the forefront.

It’s worth noting that according to Synergy Research, as of Q3 earnings reports, the top three vendors — Amazon, Microsoft and Google account for 70% of the market share. Amazon leads the cloud infrastructure market with 33% market share, Microsoft follows with around 20% and Google is in third with 10%. Oracle is in the low single digits, according to Synergy.

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