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https://www.truthdig.com/articles/amazon-microsoft-wage-war-over-the-pentagons-war-cloud/

Jul 10, 2019
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Amazon, Microsoft Battle Over Pentagon’s ‘War Cloud’
comments
<https://www.truthdig.com/articles/amazon-microsoft-wage-war-over-the-pentagons-war-cloud/#>
[image: Amazon, Microsoft Battle Over Pentagon’s ‘War Cloud’] The
Pentagon. (U.S.
Department of Defense)

Amazon and Microsoft are battling it out over a $10 billion opportunity to
build the U.S. military its first “war cloud” computing system. But
Amazon’s early hopes of a shock-and-awe victory may be slipping away.

Formally called the Joint Enterprise Defense Infrastructure plan, or JEDI,
the military’s computing project would store and process vast amounts of
classified data, allowing the Pentagon to use artificial intelligence
<https://www.apnews.com/7dcf80b023ab4c52a969affd80b91316> to speed up its
war planning and fighting capabilities. The Defense Department hopes to
award the winner-take-all contract as soon as August. Oracle and IBM were
eliminated at an earlier round of the contract competition.

But that’s only if the project isn’t derailed first. It faces a legal
challenge by Oracle and growing congressional concerns about alleged
Pentagon favoritism toward Amazon. Military officials hope to get started
soon on what will be a decade-long business partnership they describe as
vital to national security.

“This is not your grandfather’s internet,” said Daniel Goure, vice
president of the Lexington Institute, a defense-oriented think tank.
“You’re talking about a cloud where you can go from the Pentagon literally
to the soldier on the battlefield carrying classified information.”

Amazon was considered an early favorite when the Pentagon began detailing
its cloud needs in 2017, but its candidacy has been marred by an Oracle
allegation that Amazon executives and the Pentagon have been overly cozy.
Oracle has a final chance to make its case against Amazon — and the
integrity of the government’s bidding process — in a court hearing
Wednesday.

“This is really the cloud sweepstakes, which is why there are such fierce
lawsuits,” said Wedbush Securities analyst Daniel Ives.

Ives said an opportunity that was a “no brainer” for Amazon a year ago now
seems just as likely to go to Microsoft, which has spent the past year
burnishing its credentials to meet the government’s security requirements.

For years, Amazon Web Services has been the industry leader in moving
businesses and other institutions onto its cloud — a term used to describe
banks of servers in remote data centers that can be accessed from almost
anywhere. But Microsoft’s Azure cloud platform has been steadily catching
up, as have other providers such as Google, in both corporate and
government settings.

With an acronym evoking Star Wars and a price tag of up to $10 billion over
the next decade, JEDI has attracted more attention than most cloud
deals. A cloud
strategy
<https://media.defense.gov/2019/Feb/04/2002085866/-1/-1/1/DOD-CLOUD-STRATEGY.PDF>
document
unveiled by the Defense Department last year calls for replacing the
military’s “disjointed and stove-piped information systems” with a
commercial cloud service “that will empower the warfighter with data and is
critical to maintaining our military’s technological advantage.”

In a court filing last month, Lt. Gen. Bradford Shwedo said further delays
in the Oracle case will “hamper our critical efforts in AI” as the U.S.
tries to maintain its advantage over adversaries who are “weaponizing their
use of data.” Shwedo said JEDI’s computing capabilities could help the U.S.
analyze data collected from surveillance aircraft, predict when equipment
needs maintenance and speed up communications if fiber and satellite
connections go down.

Amazon was considered an early front-runner for the project in part because
of its existing high-security cloud contract with the Central Intelligence
Agency. It beat out IBM for that deal in 2013.

Worried that the Pentagon’s bid seemed tailor-made for Amazon, rivals
Oracle and IBM lodged formal protests last year arguing against the
decision to award it to a single vendor.

In an October blog post <https://www.ibm.com/blogs/policy/jedi-protest/> ,
IBM executive Sam Gordy wrote that a single-cloud approach went against
industry trends and “would give bad actors just one target to focus on
should they want to undermine the military’s IT backbone.”

The Government Accountability Office later dismissed those protests, but
Oracle persisted by taking its case to the Court of Federal Claims, where
it has pointed to emails and other documents that it says show conflicts of
interest between Amazon and the government. Oral arguments in that case are
scheduled for Wednesday. The case has delayed the procurement process,
though the Pentagon says it hopes to award the contract as early as Aug. 23.

Oracle’s argument is centered on the activities of a Defense Department
official who later went to work for Amazon. Amazon says Oracle has
exaggerated that employee’s role in the procurement using “tabloid
sensationalism.”

Some defense-contracting experts say the conflict allegations are troubling.

“No one seems to deny that these were actual conflicts and the players
affirmatively attempted to conceal them,” said Steven Schooner, a professor
of government procurement law at George Washington University. “That simply
cannot be tolerated.”

But Goure, whose think tank gets funding from Amazon but not from its cloud
rivals Microsoft, Oracle or IBM, said the criticism is “coming from the
also-rans.” He says rivals like Oracle “missed the boat” in cloud
technology and are trying to make up lost ground through legal maneuvers.

The Pentagon has repeatedly defended its bidding process, though the
concerns have trickled into Congress and onto prime-time TV. Fox News host
Tucker Carlson devoted a segment last month to the cloud contract that
questioned an Amazon executive’s 2017 meeting with then-Defense Secretary
Jim Mattis. Carlson also aired concerns
<https://www.foxnews.com/politics/amazon-pentagon-accused-of-swampy-dealings-over-10b-contract>
by
Republican Rep. Mark Meadows, who said “the allegations are incredible” and
should be investigated.

A Wall Street Journal report on Sunday
<https://www.wsj.com/articles/pentagons-cloud-project-under-fire-as-award-nears-11562491802>
further
detailed government emails about that meeting and another one between
Mattis and Amazon CEO Jeff Bezos later that year. Sen. Chuck Grassley, an
Iowa Republican, said in an emailed statement Tuesday that there are so
many questions that the Pentagon should “restart the whole process” and
wait until its inspector general can thoroughly review for potential
conflicts.

Amazon said in a statement Tuesday the meetings “had nothing to do with the
JEDI procurement” and blamed “misinformed or disappointed competitors” for
trying to imply otherwise.

Pentagon spokeswoman Elissa Smith said while military leaders are expected
to engage with industry, no one in the defense secretary’s “front office”
participated in drafting the contract requirements or soliciting bids.

Ives said it remains to be seen how much the conflict allegations will hurt
Amazon or help Microsoft. Microsoft has largely stayed quiet during the
dispute. In a statement, it focused on highlighting its 40-year partnership
supplying the military with services such as email.

But that’s only if the project isn’t derailed first. It faces a legal
challenge by Oracle and growing congressional concerns about alleged
Pentagon favoritism toward Amazon. Military officials hope to get started
soon on what will be a decade-long business partnership they describe as
vital to national security.

“This is not your grandfather’s internet,” said Daniel Goure, vice
president of the Lexington Institute, a defense-oriented think tank.
“You’re talking about a cloud where you can go from the Pentagon literally
to the soldier on the battlefield carrying classified information.”

Amazon was considered an early favorite when the Pentagon began detailing
its cloud needs in 2017, but its candidacy has been marred by an Oracle
allegation that Amazon executives and the Pentagon have been overly cozy.
Oracle has a final chance to make its case against Amazon — and the
integrity of the government’s bidding process — in a court hearing
Wednesday.

“This is really the cloud sweepstakes, which is why there are such fierce
lawsuits,” said Wedbush Securities analyst Daniel Ives.

Ives said an opportunity that was a “no brainer” for Amazon a year ago now
seems just as likely to go to Microsoft, which has spent the past year
burnishing its credentials to meet the government’s security requirements.

For years, Amazon Web Services has been the industry leader in moving
businesses and other institutions onto its cloud — a term used to describe
banks of servers in remote data centers that can be accessed from almost
anywhere. But Microsoft’s Azure cloud platform has been steadily catching
up, as have other providers such as Google, in both corporate and
government settings.

With an acronym evoking Star Wars and a price tag of up to $10 billion over
the next decade, JEDI has attracted more attention than most cloud
deals. A cloud
strategy
<https://media.defense.gov/2019/Feb/04/2002085866/-1/-1/1/DOD-CLOUD-STRATEGY.PDF>
document unveiled by the Defense Department last year calls for replacing
the military’s “disjointed and stove-piped information systems” with a
commercial cloud service “that will empower the warfighter with data and is
critical to maintaining our military’s technological advantage.”

In a court filing last month, Lt. Gen. Bradford Shwedo said further delays
in the Oracle case will “hamper our critical efforts in AI” as the U.S.
tries to maintain its advantage over adversaries who are “weaponizing their
use of data.” Shwedo said JEDI’s computing capabilities could help the U.S.
analyze data collected from surveillance aircraft, predict when equipment
needs maintenance and speed up communications if fiber and satellite
connections go down.

Amazon was considered an early front-runner for the project in part because
of its existing high-security cloud contract with the Central Intelligence
Agency. It beat out IBM for that deal in 2013.

Worried that the Pentagon’s bid seemed tailor-made for Amazon, rivals
Oracle and IBM lodged formal protests last year arguing against the
decision to award it to a single vendor.

In an October blog post <https://www.ibm.com/blogs/policy/jedi-protest/> ,
IBM executive Sam Gordy wrote that a single-cloud approach went against
industry trends and “would give bad actors just one target to focus on
should they want to undermine the military’s IT backbone.”

The Government Accountability Office later dismissed those protests, but
Oracle persisted by taking its case to the Court of Federal Claims, where
it has pointed to emails and other documents that it says show conflicts of
interest between Amazon and the government. Oral arguments in that case are
scheduled for Wednesday. The case has delayed the procurement process,
though the Pentagon says it hopes to award the contract as early as Aug. 23.

Oracle’s argument is centered on the activities of a Defense Department
official who later went to work for Amazon. Amazon says Oracle has
exaggerated that employee’s role in the procurement using “tabloid
sensationalism.”

Some defense-contracting experts say the conflict allegations are troubling.

“No one seems to deny that these were actual conflicts and the players
affirmatively attempted to conceal them,” said Steven Schooner, a professor
of government procurement law at George Washington University. “That simply
cannot be tolerated.”

But Goure, whose think tank gets funding from Amazon but not from its cloud
rivals Microsoft, Oracle or IBM, said the criticism is “coming from the
also-rans.” He says rivals like Oracle “missed the boat” in cloud
technology and are trying to make up lost ground through legal maneuvers.

The Pentagon has repeatedly defended its bidding process, though the
concerns have trickled into Congress and onto prime-time TV. Fox News host
Tucker Carlson devoted a segment last month to the cloud contract that
questioned an Amazon executive’s 2017 meeting with then-Defense Secretary
Jim Mattis. Carlson also aired concerns
<https://www.foxnews.com/politics/amazon-pentagon-accused-of-swampy-dealings-over-10b-contract>
by Republican Rep. Mark Meadows, who said “the allegations are incredible”
and should be investigated.

A Wall Street Journal report on Sunday
<https://www.wsj.com/articles/pentagons-cloud-project-under-fire-as-award-nears-11562491802>
further detailed government emails about that meeting and another one
between Mattis and Amazon CEO Jeff Bezos later that year. Sen. Chuck
Grassley, an Iowa Republican, said in an emailed statement Tuesday that
there are so many questions that the Pentagon should “restart the whole
process” and wait until its inspector general can thoroughly review for
potential conflicts.

Amazon said in a statement Tuesday the meetings “had nothing to do with the
JEDI procurement” and blamed “misinformed or disappointed competitors” for
trying to imply otherwise.

Pentagon spokeswoman Elissa Smith said while military leaders are expected
to engage with industry, no one in the defense secretary’s “front office”
participated in drafting the contract requirements or soliciting bids.

Ives said it remains to be seen how much the conflict allegations will hurt
Amazon or help Microsoft. Microsoft has largely stayed quiet during the
dispute. In a statement, it focused on highlighting its 40-year partnership
supplying the military with services such as email.