Amazon and Microsoft

Amazon Loses Pentagon’s Award Worth $ 10 Billion

Claiming biased decision, Amazon filed a case in the US Federal court on November 8, 2019, challenging the Pentagon’s decision of $ 10 billion Joint Enterprise Defense Infrastructure (JEDI) contract to Microsoft Corp.

Amazon was expected to win the contract, as it had been dealing in cloud computing for a longer time than Microsoft Corp.

Presently, Amazon has the highest-level security certification of ‘Impact Level 6’.

What is the JEDI Contract?

Under the JEDI contract, the company will provide a large cloud computing space to store high-level military information for the US Department of Defense (DoD).

Microsoft signed the contract on October 25, 2019, and the $ 10 billion contracts are signed for the tenure of 10 years. Other bidding companies included Google, Oracle, and IBM.

However, Amazon Web Services (AWS), a tech division of Amazon.com, Inc., was considered to be the right choice, as it was a major provider of the commercial computing systems and had expertise in military services for a long time.

Why Filed Case Against the Decision?

Amazon blamed President Donald Trump for manipulating the decision and influencing Pentagon’s last-minute turn down of its bid.

It is speculated that Amazon’s CEO, Jeff Bezos, who also owns the Washington Post Trump’s political rival. This could be one of the key reasons for Trump to have rejected Amazon for the JEDI contract.

Amazon VS Microsoft Corporation Duet

The company’s defeat in the bidding is considered a huge blow to its plan on increasing employees to 25,000 over the next 10 years.

According to the Bloomberg Billionaires Index, Microsoft’s co-founder, Bill Gates regained the title of the richest person in the world having net assets worth $ 110 billion in mid-November 2019. He succeeded Jeff Bezos two year record.

Jeff’s assets are just $ 1 billion lesser than that of his rival. After his $ 35 billion divorce settlement with ex-wife MacKenzie Bezos on July 5, 2019, Amazon’s market share decreased by 0.86%. On the contrary, Microsoft’s market share increased by 4% after Gates’ signed the JEDI contract with the DoD.

Amazon faced another financial blow with the decline in the share of about 2% after losing the JEDI contract. If this trend continues, Bernard Arnault, the CEO of LVMH, is likely to take Jeff’s position in the company.

In the third quarter of 2019, LVMH’s revenue increased by $ 34.1 billion, thus making Arnault the third wealthiest person in the world. His current net asset is worth $ 103.

Sources:

  1. https://www.washingtonpost.com/business/2019/11/14/amazon-will-challenge-pentagons-award-billion-jedi-contract-microsoft/
  2. https://siliconangle.com/2019/11/14/amazon-protests-pentagons-cloud-computing-contract-award-citing-unmistakable-bias/
  3. https://www.marketwatch.com/story/bill-gates-passes-jeff-bezos-for-title-of-worlds-richest-person-2019-11-17

I’m Roshan, a journalist, blogger and music lover. I like covering global news related to finance, business, and technology. Focusing on the collection of true and reliable information, I rely on working by conducting interviews with business leaders and talking to the inside sources of companies.

You can reach out to me at: [email protected]

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