AWS Reportedly Faces More Opposition For JEDI Cloud Contract

A wider array of tech companies is reportedly trying to prevent the Pentagon's multi-billion cloud services contract from ending up in the hands of a single entity: Amazon's cloud services unit.

According to Bloomberg, which cited internal emails, the coalition consists of nine companies: SAP America, General Dynamics Corp.’s CSRA unit, Red Hat Inc., and VMware Inc., which are working with Oracle, Microsoft, IBM, Dell Technologies, and HPE as a group to oppose the terms of the deal as it stands.

While Bloomberg reports that SAP and some of the other companies are not considered direct competition for the contract – known as the Joint Enterprise Defense Infrastructure, or JEDI -- they are concerned that by awarding the deal to Amazon Web Services, or any single company, it would hurt their current deals with the military as well as any chance they may have of obtaining future contracts.

Companies within the coalition have started discussing joint bids for the contract, sources told Bloomberg.

The Pentagon has paused bidding on the contract. However, it is expected to announced a winner in September, Bloomberg reported.

In previous interviews, Amazon Web Services CEO Andy Jassy, has acknowledged that the race will be tight, and pointed to AWS' "significant' government business as a differentiator. More than 3,000 government agencies worldwide rely on the Amazon cloud, including some in the U.S. intelligence community, he said. That includes the CIA's 10-year, $600-million deal with AWS to build out a private cloud system for the agency.

Jassy added that while the major technology providers are all interested in the contract, he also suggested that some of the recent complaints are sour grapes.

Oracle first raised concerns about the bidding process for large government cloud computing contracts when the company's co-CEO Safra Catz sat down with President Trump during a private dinner in April. Since then, Oracle has been leading the charge to lobby against AWS winning the entire contract as other cloud and IT hardware giants have joined the fray.

In February, Oracle issued a formal complaint through the Government Accountability Office after Rean, a major AWS channel partner based in Herndon, Va., revealed that it had landed a nearly $1 billion contract with the U.S. Transportation Command that is being viewed as a potential precursor to the larger JEDI contract.

The tech leaders have said that by relying on multiple providers, vendor lock-in can be avoided while delivering more innovation, lower costs, and better security.