Amazon vs Microsoft. Judge halts work on JEDI contract by Pentagon

Amazon believe JEDI contract was not awarded on merit to Microsoft.

On the request by Amazon, a federal judge has ordered Microsoft to stop proceeding the JEDI Project and asked to cease any work going on the ‘$10 billion cloud-computing contract’ for the Pentagon until Amazon’s challenge of awarding the project to Microsoft is resolved.

Joint Enterprise Defense Infrastructure – JEDI, a cloud computing contract worth $10 billion by the United States Department of Defence was eyed by many big giants like Amazon, Google, Microsft, Oracle, and IBM. However, Google stepped back from the contention citing some internal issues. Pentagon called remaining tech companies to bid for its cloud contract.  

Later, a news break-in that Microsoft won the contract beating, the favorites, Amazon. Amazon’s cloud computing solution known as Amazon Web Services (AWS) is the largest and most popular cloud computing solution. 

Amazon got disappointed as the company claims that they have more potential than Microsoft to take over the contract and it seems like Trump has used improper pressure on the Pentagon. The company believes that President Donald Trump’s personal enmity with CEO Jeff Bezos is the reason that Trump exercised his power to favor Microsoft just to retaliate Amazon.

Previously, Trump has been criticizing Amazon’s CEO, Jeff Bezos, for a long time and is in a forever hot fight with The Washington Post, owned by Bezos, journalists. 

A spokesperson from Amazon said, “the question is whether the president of the United States should be allowed to use the budget of the D.O.D to pursue his own personal and political end”.

The judge, Campbell-Smith has asked Amazon to deposit $42 million to the court by February 20 in case if the injunction creates damages to Microsoft, and Amazon’s stance of “clear deficiencies, errors and unmistakable bias” found wrong. In other words, if Microsoft wins then the money ($42 million) will be given to Microsoft as damage repair. 

Daniel Ives, an analyst for Wedbush Securities says that the preliminary injunction was a “prudent decision” but to deal with the complexities and for the monetary stakes, Amazon is asked to pay $42 million which is not a burden for the company at least. Ives believes that the initial $10 billion JEDI project will evolve in the future to $40 billion which can bring large profits to Microsoft.

READ: MWC 2020 is canceled as tech companies back off over coronavirus

Once the money is submitted to the court by February 20, the court will take it as an agreement to redactions and after that, on February 27 the court will make the judgment public. 

Despite all the issues, Microsoft is still doing the preparations and planning to work on the JEDI project and Brad Smith, Microsoft President, and Chief Legal Officer says that the company was moving faster since the JEDI contract was awarded. 

Amazon is hopeful that the company will turn down president Trump, former Defense Secretary James Mattis and current Defense Secretary Mark Esper in the JEDI case. But nothing is clear what will happen next until the lawsuit from Amazon is resolved.

Featured image: Bloomberg Finance LP

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