The Department of Defense’s controversial JEDI project – the $10 billion cloud computing initiative thats been the focus of vendor lawsuits and politics at the highest levels – is no more.
Agency officials this week announced they have killed the contract with Microsoft, claiming that technology advances in the cloud computing space and the DoD’s changing requirements essentially made the JEDI (Joint Enterprise Defense Infrastructure) project out of date. The DoD is now developing a new cloud project called the Joint Warfighter Cloud Capability, or JWCC.
However, while there’s no doubt that the booming and highly competitive space is constantly evolving, the legal fighting battles involving Amazon Web Services (AWS), Microsoft Azure, Oracle Cloud and IBM Cloud and messaging by the Trump Administration likely played a significant role in the final decision to dump JEDI.
“Technology in this space is moving very fast, and rethinking this project does make sense,” Rob Enderle, principal analyst with The Enderle Group, told InternetNews. “But realize that this process takes excessive time so almost every bid could be put in perpetual re-bid and that isn’t the case [with JEDI]. Because of the cloud put over the result [of Microsoft winning the contract], this needed to be redone.”
A DoD Cloud
The JEDI program was aimed at creating a cloud foundation to modernize much of the DoD’s IT operations. The agency insisted on a single-vendor contract, drawing criticism from Oracle and IBM, which accused the government of slanting the contract requirements in favor of AWS and Azure, the world’s two largest public cloud service providers (CSPs). A lawsuit by Oracle eventually was dropped.
Google Cloud initially also was interested but pulled out of the running at the urging of many of its employees.
In October 2019, the Defense Department awarded the 10-year contract to Microsoft, a move that surprised some industry observers who had assumed AWS would win the deal. Such a large contract promised to help Microsoft drive revenues and gain ground on AWS in a cloud infrastructure services market that generated more than $39 billion in enterprise spending in the first quarter, according to Synergy Research Group. Microsoft holds about 20 percent of the market; AWS about 34 percent.
AWS sued the DoD a month after Microsoft got the contract, claiming it was driven by then-President Trump’s widely publicized criticism of then-Amazon CEO Jeff Bezos, who also owns The Washington Post. Amazon officials claimed Trump’s bias against Bezos influenced the DoD’s decision to award Microsoft the contract, noting the then-president’s pattern of using his position to interfere with government business when it suited his political agenda.
In February 2020, a federal court granted AWS’ request for an injunction.
Defense Department: JEDI Outdated
In a statement, John Sherman, acting DoD chief information officer, said the department’s needs for a commercial cloud service have expanded since JEDI was first announced, with efforts such as the Joint All Domain Command and Control (JADC2) and the Artificial Intelligence and Data Acceleration (ADA) initiatives.
“JEDI was developed at a time when the Department’s needs were different and both the CSPs’ technology and our cloud conversancy was less mature.” Sherman said. “In light of new initiatives like JADC2 and AI and Data Acceleration, the evolution of the cloud ecosystem within DoD, and changes in user requirements to leverage multiple cloud environments to execute mission, our landscape has advanced and a new way-ahead is warranted to achieve dominance in both traditional and non-traditional warfighting domains.”
However, the impact of the contentious political landscape during Trump’s tenure can’t be overlooked, Enderle said.
“I think the problem with this deal was the Trump Administration seemingly introducing bias into the bidding process and corrupting it,” he said. “The Washington Post, also controlled by Amazon’s then CEO, was what focused the administration against Amazon. The lesson here may be that taking a public position against anyone with a vote in the outcome of an RFP [request for proposal] would be ill-advised, suggesting The Washington Post purchase was counter-strategic to Amazon’s ability to win bids. But this was mostly a DoD/Administration screwup and not the result of mis-action by any of the bidders.”
Bezos has since stepped down as Amazon CEO, handing the position over this month to AWS chief Andy Jassy.
AWS vs. Microsoft: Round 2
That said, AWS and Microsoft will find themselves once again competing for the department’s contract, this time for the JWCC initiative. The DoD said this multicloud project will include multiple cloud vendors. Department officials said they will ask for proposals from a limited number of sources, primarily AWS and Azure, citing that they are the only two CSPs that are capable of meeting their requirements. However, they said they also will see if there are other U.S.-based hyperscale cloud providers that can address the requirements and, if so, will negotiate with those companies.
In a blog post, Toni Townes-Whitley, president of U.S. regulated industries at Microsoft, wrote that the company will continue working with the DoD with the new project and other initiatives, adding that “it’s clear the DoD trusts Microsoft and our technology, and we’re confident that we’ll continue to be successful as the DoD selects partners for new work. Their decision today doesn’t change the fact that not once, but twice, after careful review by professional procurement staff, the DoD decided that Microsoft and our technology best met their needs.”
Townes-Whitley also pointed the blame for the demise of JEDI at Amazon, saying that lawmakers need to address the issue of vendors holding up important projects through litigation.
“The 20 months since DoD selected Microsoft as its JEDI partner highlights issues that warrant the attention of policymakers: when one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform,” she wrote. “Amazon filed its protest in November 2019 and its case was expected to take at least another year to litigate and yield a decision, with potential appeals afterward.”
For their part, Amazon officials also said they remain committed to working with the DoD, saying in a statement to the media that they “understand and agree with the DoD’s decision. Unfortunately, the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement.”
Enderle said a cloud project such as JEDI or JWCC remains critical to the Defense Department’s ability to reduce costs and improve speed and efficiency. However, he is concerned that the issue of security is not a higher focus. That can be seen by the DoD offering a list of possible CSPs for the project – AWS and Microsoft – that seems “too restrictive to me.”
“It shines a light on my security concerns as IBM in particular would seem to be a better match for a project like this, and they aren’t even on the list of those bidding,” he said. “Google wouldn’t make the cut because their employees are against this and would represent an unacceptable security risk as a result.”