Nobody wins as DoD finally pulls the plug on controversial $10B JEDI contract

After several years of fighting and jockeying for position by the biggest cloud infrastructure companies in the world, the Pentagon finally pulled the plug on the controversial winner-take-all $10 billion JEDI contract today. In the end, nobody won.

“With the shifting technology environment, it has become clear that the JEDI cloud contract, which has long been delayed, no longer meets the requirements to fill the DoD’s capability gaps,” a Pentagon spokesperson stated.

The contract procurement process began in 2018 with a call for RFPs for a $10 billion, decade long contract to handle the cloud infrastructure strategy for The Pentagon. Pentagon spokesperson Heather Babb told TechCrunch why they were going with the. single-winner approach: “Single award is advantageous because, among other things, it improves security, improves data accessibility and simplifies the Department’s ability to adopt and use cloud services,” she said at the time.

From the start though, companies objected to the single winner approach, believing that the Pentagon would be better served with a multi-vendor approach. Some companies, particularly Oracle believed the procurement process was designed to favor Amazon.

In the end it came down to a pair of finalists — Amazon and Microsoft — and in the end Microsoft won. But Amazon believed that it had superior technology and only lost the deal because of direct interference by the previous president, who had open disdain for then CEO Jeff Bezos (who is also the owner of the Washington Post newspaper).

Amazon decided to fight the decision in court, and after months of delay, the Pentagon made the decision that it was time to move on. In a blog post, Microsoft took a swipe at Amazon for precipitating the delay.

“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. 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,” Microsoft wrote in its blog post about the end of the deal.

It seems like a fitting end to a project that felt like it was doomed from the beginning. From the moment the Pentagon announced this contract with the cutesy twist on Star Wars name, the procurement process has taken more twist and turns than a TV soap.

In the end, there was a lot of sound and fury and now a lot of nothing. We move onto whatever cloud procurement process happens next.

Note: We have a request into Amazon for a comment and will update the story when they respond.


By Ron Miller

Tableau CEO Adam Selipsky is returning to AWS to replace Andy Jassy as CEO

When Amazon announced last month that Jeff Bezos was moving into the executive chairman role, and AWS CEO Andy Jassy would be taking over the entire Amazon operation, speculation began about who would replace Jassy.

People considered a number of internal candidates such as Peter DeSantis, vice president of global infrastructure at AWS and Matt Garman, who is vice president of sales and marketing. Not many would have chosen Tableau CEO Adam Selipsky, but sure enough he is returning home to run the division he left in 2016.

In an email to employees, Jassy wasted no time getting to the point that Selipsky was his choice, saying that the former employee who helped launch the division when they hired him 2005, spent 11 years helping Jassy build the unit before taking the job at Tableau. Through that lens, the the choice makes perfect sense.

“Adam brings strong judgment, customer obsession, team building, demand generation, and CEO experience to an already very strong AWS leadership team. And, having been in such a senior role at AWS for 11 years, he knows our culture and business well,” Jassy wrote in the email.

Jassy has run the AWS since its earliest days taking it from humble beginnings as a kind of internal experiment on running a storage web service to building a mega division currently on a $51 billion run rate. It is that juggernaut that will be Selipsky to run, but he seems well suited for the job.

He is a seasoned executive, and while he’s been away from AWS when it really began to grow, he still understands the culture well enough to step smoothly into the role.  At the same, he’s leaving Tableau, a company he helped transform from a desktop software company into one firmly in the cloud.

Salesforce bought Tableau in June 2019 for a cool $15.7 billion and Selipsky has remained at the helm since then, but perhaps the lure of running AWS was too great and he decided to take the leap to the new job.

When we wrote a story at the end of last year about Salesforce’s deep bench of executive talent one of the CEOs we pointed at as a possible replacement was Selipsky. But with it looking more like president and COO Bret Taylor would be the heir apparent, perhaps Selipsky was ready for a new challenge.

Selipsky will make his return to AWS on May 17th and spend a few weeks with Jassy in a transitional time before taking over to run the division on his own. As Jassy slides into the Amazon CEO role, it’s clear the two will continue to work closely together, just like they did all those years ago.


By Ron Miller

Is overseeing cloud operations the new career path to CEO?

When Amazon announced last week that founder and CEO Jeff Bezos planned to step back from overseeing operations and shift into an executive chairman role, it also revealed that AWS CEO Andy Jassy, head of the company’s profitable cloud division, would replace him.

As Bessemer partner Byron Deeter pointed out on Twitter, Jassy’s promotion was similar to Satya Nadella’s ascent at Microsoft: in 2014, he moved from executive VP in charge of Azure to the chief exec’s office. Similarly, Arvind Krishna, who was promoted to replace Ginni Rometti as IBM CEO last year, also was formerly head of the company’s cloud business.

Could Nadella’s successful rise serve as a blueprint for Amazon as it makes a similar transition? While there are major differences in the missions of these companies, it’s inevitable that we will compare these two executives based on their former jobs. It’s true that they have an awful lot in common, but there are some stark differences, too.

Replacing a legend

For starters, Jassy is taking over for someone who founded one of the world’s biggest corporations. Nadella replaced Steve Ballmer, who had taken over for the company’s face, Bill Gates. Holger Mueller, an analyst at Constellation Research, says this notable difference could have a huge impact for Jassy with his founder boss still looking over his shoulder.

“There’s a lot of similarity in the two situations, but Satya was a little removed from the founder Gates. Bezos will always hover and be there, whereas Gates (and Ballmer) had retired for good. [ … ] It was clear [they] would not be coming back. [ … ] For Jassy, the owner could [conceivably] come back anytime,” Mueller said.

But Andrew Bartels, an analyst at Forrester Research, says it’s not a coincidence that both leaders were plucked from the cloud divisions of their respective companies, even if it was seven years apart.

“In both cases, these hyperscale business units of Microsoft and Amazon were the fastest-growing and best-performing units of the companies. [ … ] In both cases, cloud infrastructure was seen as a platform on top of which and around which other cloud offerings could be developed,” Bartels said. The companies both believe that the leaders of these two growth engines were best suited to lead the company into the future.


By Ron Miller

What Andy Jassy’s promotion to Amazon CEO could mean for AWS

Blockbuster news struck late this afternoon when Amazon announced that Jeff Bezos would be stepping back as CEO of Amazon, the company he built from a business in his garage to worldwide behemoth. As he takes on the role of executive chairman, his replacement will be none other than AWS CEO Andy Jassy.

With Jassy moving into his new role at the company, the immediate question is who replaces him to run AWS. Let the games begin. Among the names being tossed about in the rumor mill are Peter DeSantis, vice president of global infrastructure at AWS and Matt Garman, who is Vice President of sales and marketing. Both are members of Bezos’ elite executive team known as the S-team and either would make sense as Jassy’s successor. Nobody knows for sure though, and it could be any number of people inside the organization, or even someone from outside. (We have asked Amazon PR to provide clarity on the successor, but as of publication we had not heard from them.)

Holger Mueller, a senior analyst at Constellation Research, says that Jassy is being rewarded for doing a stellar job raising AWS from a tiny side business to one on a $50 billion run rate. “On the finance side it makes sense to appoint an executive who intimately knows Amazon’s most profitable business, that operates in more competitive markets. [Appointing Jassy] ensures that the new Amazon CEO does not break the ‘golden goose’,” Mueller told me.

Alex Smith, VP of channels, who covers the cloud infrastructure market at analyst firm Canalys, says the writing has been on the wall that a transition was in the works. “This move has been coming for some time. Jassy is the second most public-facing figure at Amazon and has lead one of its most successful business units. Bezos can go out on a high and focus on his many other ventures,” Smith said.

Smith adds that this move should enhance AWS’s place in the organization. “I think this is more of an AWS gain, in terms of its increasing strategic importance to Amazon going forwards, rather than loss in terms of losing Andy as direct lead. I expect he’ll remain close to that organization.”

Ed Anderson, a Gartner analyst also sees Jassy as the obvious choice to take over for Bezos. “Amazon is a company driven by technology innovation, something Andy has been doing at AWS for many years now. Also, it’s worth noting that Andy Jassy has an impressive track record of building and running a very large business. Under Andy’s leadership, AWS has grown to be one of the biggest technology companies in the world and one of the most impactful in defining what the future of computing will be,” Anderson said.

In the company earnings report released today, AWS came in at $12.74 billion for the quarter up 28% YoY from $9.60 billion a year ago. That puts the company on an elite $50 billion run rate. No other cloud infrastructure vendor, even the mighty Microsoft, is even close in this category. Microsoft stands at around 20% marketshare compared to AWS’s approximately 33% market share.

It’s unclear what impact the executive shuffle will have on the company at large or AWS in particular. In some ways it feels like when Larry Ellison stepped down as CEO of Oracle in 2014 to take on the exact same executive chairman role. While Safra Catz and Mark Hurd took over at co-CEOs in that situation, Ellison has remained intimately involved with the company he helped found. It’s reasonable to assume that Bezos will do the same.

With Jassy, the company is getting a man who has risen through the ranks since joining the company in 1997 after getting an undergraduate degree and an MBA from Harvard. In 2002 he became VP/ technical assistant, working directly under Bezos. It was in this role that he began to see the need for a set of common web services for Amazon developers to use. This idea grew into AWS and Jassy became a VP at the fledgling division working his way up until he was appointed CEO in 2016.


By Ron Miller

WhyLabs brings more transparancy to ML ops

WhyLabs, a new machine learning startup that was spun out of the Allen Institute, is coming out of stealth today. Founded by a group of former Amazon machine learning engineers, Alessya Visnjic, Sam Gracie and Andy Dang, together with Madrona Venture Group principal Maria Karaivanova, WhyLabs’ focus is on ML operations after models have been trained — not on building those models from the ground up.

The team also today announced that it has raised a $4 million seed funding round from Madrona Venture Group, Bezos Expeditions, Defy Partners and Ascend VC.

Visnjic, the company’s CEO, used to work on Amazon’s demand forecasting model.

“The team was all research scientists, and I was the only engineer who had kind of tier-one operating experience,” she told me. “So it was like, ”Okay, how bad could it be?’ I carried the pager for the retail website before it can be bad. But it was one of the first AI deployments that we’d done at Amazon at scale. The pager duty was extra fun because there were no real tools. So when things would go wrong — like we’d order way too many black socks out of the blue — it was a lot of manual effort to figure out why was this happening.”

Image Credits: WhyLabs

But while large companies like Amazon have built their own internal tools to help their data scientists and AI practitioners operate their AI systems, most enterprises continue to struggle with this — and a lot of AI projects simply fail and never make it into production. “We believe that one of the big reasons that happens is because of the operating process that remains super manual,” Visnjic said. “So at WhyLabs, we’re building the tools to address that — specifically to monitor and track data quality and alert — you can think of it as Datadog for AI applications.”

The team has brought ambitions, but to get started, it is focusing on observability. The team is building — and open-sourcing — a new tool for continuously logging what’s happening in the AI system, using a low-overhead agent. That platform-agnostic system, dubbed WhyLogs, is meant to help practitioners understand the data that moves through the AI/ML pipeline.

For a lot of businesses, Visnjic noted, the amount of data that flows through these systems is so large that it doesn’t make sense for them to keep “lots of big haystacks with possibly some needles in there for some investigation to come in the future.” So what they do instead is just discard all of this. With its data logging solution, WhyLabs aims to give these companies the tools to investigate their data and find issues right at the start of the pipeline.

Image Credits: WhyLabs

According to Karaivanova, the company doesn’t have paying customers yet, but it is working on a number of proofs of concepts. Among those users is Zulily, which is also a design partner for the company. The company is going after mid-size enterprises for the time being, but as Karaivanova noted, to hit the sweet spot for the company, a customer needs to have an established data science team with 10 to 15 ML practitioners. While the team is still figuring out its pricing model, it’ll likely be a volume-based approach, Karaivanova said.

“We love to invest in great founding teams who have built solutions at scale inside cutting-edge companies, who can then bring products to the broader market at the right time. The WhyLabs team are practitioners building for practitioners. They have intimate, first-hand knowledge of the challenges facing AI builders from their years at Amazon and are putting that experience and insight to work for their customers,” said Tim Porter, managing director at Madrona. “We couldn’t be more excited to invest in WhyLabs and partner with them to bring cross-platform model reliability and observability to this exploding category of MLOps.”


By Frederic Lardinois

The $10B JEDI contract is locked, loaded, and still completely stuck

The other day I took a moment to count the number of stories we’ve done on TechCrunch on the DoD’s $10 billion, decade-long, winner-take-all, JEDI cloud contract. This marks the 30th time we’ve written about this deal over the last two years, and it comes after a busy week last week in JEDI cloud contract news.

That we’re still writing about this is fairly odd if you consider the winner was announced last October when the DoD chose Microsoft, but there is no end in sight to the on-going drama that is this procurement process.

Government contracts don’t typically catch our attention at TechCrunch, but this one felt different early on. There was the size and scope of the deal of course. There was the cute play on the Star Wars theme. There was Oracle acting like a batter complaining to the umpire before the first pitch was thrown. There was the fact that everyone thought Amazon would win until it didn’t.

There was a lot going on. In fact, there’s still a lot going on with this story.

Oracle doth protest too much

Let’s start with Oracle, which dispatched CEO Safra Catz to the White House in April 2018 even before the RFP had been written. She was setting the stage to complain that the deal was going to be set up to favor Amazon, something that Oracle alleged until the day Microsoft was picked the winner.

Catz had been on the Trump transition team and so had the ear of the president. While the president certainly interjected himself in this process, it’s not known how much influence that particular meeting might have had. Suffice to say that it was only the first volley in Oracle’s long war against the JEDI contract procurement process.

It would include official complaints with the Government Accountability Office and a federal lawsuit worth not coincidentally $10 billion. It would claim the contract favored Amazon. It would argue that the one-vendor approach wasn’t proper. It would suggest that because the DoD had some former Amazon employees helping write the RFP, that it somehow favored Amazon. The GAO and two court cases found otherwise, ruling against Oracle every single time.

It’s worth noting that the Court of Appeals ruling last week indicated that Oracle didn’t even meet some of the basic contractual requirements, all the while complaining about the process itself from the start.

Amazon continues to press protests

Nobody was more surprised that Amazon lost the deal than Amazon itself. It still believes to this day that it is technically superior to Microsoft and that it can offer the DoD the best approach. The DoD doesn’t agree. On Friday, it reaffirmed its choice of Microsoft. But that is not the end of this, not by a long shot.

Amazon has maintained since the decision was made last October that the decision-making process had been tainted by presidential interference in the process. They believe that because of the president’s personal dislike of Amazon CEO Jeff Bezos, who also owns the Washington Post, he inserted himself in the process to prevent Bezos’ company from winning that deal.

In January, Amazon filed a motion to stop work on the project until this could all be sorted out. In February, a judge halted work on the project until Amazon’s complaints could be heard by the court. It is September and that order is still in place.

In a blog post on Friday, Amazon reiterated its case, which is based on presidential interference and what it believes is technical superiority. “In February, the Court of Federal Claims stopped performance on JEDI. The Court determined AWS’s protest had merit, and that Microsoft’s proposal likely failed to meet a key solicitation requirement and was likely deficient and ineligible for award. Our protest detailed how pervasive these errors were (impacting all six technical evaluation factors), and the Judge stopped the DoD from moving forward because the very first issue she reviewed demonstrated serious flaws,” Amazon wrote in the post.

Microsoft for the win?

Microsoft on the other hand went quietly about its business throughout this process. It announced Azure Stack, a kind of portable cloud that would work well as a field operations computer system. It beefed up its government security credentials.

Even though Microsoft didn’t agree with the one-vendor approach indicating that the government would benefit more from the multi-vendor approach many of its customers were taking, it made clear if those were the rules, it was in it to win it — and win it did, much to the surprise of everyone, especially Amazon.

Yet here we are, almost a year later and in spite of the fact that the DoD found once again, after further review, that Microsoft is still the winner, the contract remains in limbo. Until that pending court case is resolved, we will continue to watch and wait and wonder if this will ever be truly over, and the JEDI cloud contract will actually be implemented.


By Ron Miller

Microsoft and AWS exchange poisoned pen blog posts in latest Pentagon JEDI contract spat

Microsoft and Amazon are at it again as the fight for the Defense Department JEDI contract continues. In a recent series of increasingly acerbic pronouncements, the two companies continue their ongoing spat over the $10 billion, decade-long JEDI contract spoils.

As you may recall (or not), last fall in a surprise move, the DoD selected Microsoft as the winning vendor in the JEDI winner-take-all cloud infrastructure sweepstakes. The presumed winner was always AWS, but when the answer finally came down, it was not them.

To make a very long story short, AWS took exception to the decision and went to court to fight it. Later it was granted a stay of JEDI activities between Microsoft and the DoD, which as you can imagine did not please Microsoft . Since then, the two companies have been battling in PR pronouncements and blog posts trying to get the upper hand in the war for public opinion.

That fight took a hard turn this week when the two companies really went at it in dueling blog posts after Amazon filed its latest protest.

First there was Microsoft with PR exec Frank Shaw taking exception to AWS’s machinations, claiming the company just wants a do-over:

This latest filing – filed with the DoD this time – is another example of Amazon trying to bog down JEDI in complaints, litigation and other delays designed to force a do-over to rescue its failed bid.

Amazon’s Drew Herdner countered in a blog post published this morning:

Recently, Microsoft has published multiple self-righteous and pontificating blog posts that amount to nothing more than misleading noise intended to distract those following the protest.

The bottom line is that Microsoft believes it won the contract fair and square with a more competitive bid, while Amazon believes it should have won on technical superiority, and that there was political interference from the president because he doesn’t like Amazon CEO Jeff Bezos, who also owns the Washington Post.

If you’ve been following this story from the beginning (as I have), you know it has taken a series of twists and turns. It’s had lawsuits, complaints, drama and intrigue. The president has inserted himself into it too. There have been accusations of conflicts of interest. There have been investigations, lawsuits, and more investigations.

Government procurement tends to be pretty bland, but from the start when the DoD chose to use the cutesy Star Wars-driven acronym for this project, it has been anything but. Now it’s come down to two of the world’s largest tech companies exchanging angry blog posts. Sooner or later this is going to end right?


By Ron Miller

DoD Inspector General report finds everything was basically hunky-dory with JEDI cloud contract bid

While controversy has dogged the $10 billion, decade-long JEDI contract since its earliest days, a report by the DoD’s Inspector General’s Office concluded today that, while there were some funky bits and potential conflicts, overall the contract procurement process was fair and legal and  the president did not unduly influence the process in spite of public comments.

There were a number of issues along the way about whether the single contractor award was fair or reasonable, about whether there were was White House influence on the decision, and whether the president wanted to prevent Amazon founder Jeff Bezos, who also owns the Washington Post, from getting the contract.

There were questions about whether certain personnel, who had been or were about to be Amazon employees, had undue influence on the contents of the RFP or if former Secretary of Defense showed favor to Amazon, which ultimately did not even win the contract, and that one of Mattis’ under secretaries, in fact, owned stock in Microsoft .

It’s worth noting that the report states clearly that it is not looking at the merits of this contract award or whether the correct company won on technical acumen. It was looking at all of these controversial parts came up throughout the process. As the report stated:

“In this report, we do not draw a conclusion regarding whether the DoD appropriately awarded the JEDI Cloud contract to Microsoft rather than Amazon Web Services. We did not assess the merits of the contractors’ proposals or DoD’s technical or price evaluations; rather we reviewed the source selection process and determined that it was in compliance with applicable statutes, policies, and the evaluation process described in the Request for Proposals.”

Although the report indicates that the White House would not cooperate with the investigation into potential bias, the investigators claim they had enough discussions with parties involved with the decision to conclude that there was no undue influence on the White House’s part:

“However, we believe the evidence we received showed that the DoD personnel who evaluated
the contract proposals and awarded Microsoft the JEDI Cloud contract were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House,” the report stated.

The report chose to blame the media instead, at least for partly giving the impression that the White House had influenced the process, stating:

“Yet, these media reports, and the reports of President Trump’s statements about Amazon, ongoing bid protests and “lobbying” by JEDI Cloud competitors, as well as inaccurate media reports about the JEDI Cloud procurement process, may have created the appearance or perception that the contract award process was not fair or unbiased.”

It’s worth noting that we reported that AWS president Andy Jassy made it clear in a press conference at AWS re:Invent in December that the company believed the president’s words had influenced the process.

“I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”

As for other points of controversy, such as those previously referenced biases, all were found lacking by the Inspector General. While the earliest complaints from Oracle and others were that Deap Ubhi and Victor Gavin, two individuals involved in drafting the RFP, failed to disclose they were offered jobs by Amazon during that time.

The report concluded that while Ubhi violated ethics rules, his involvement wasn’t substantial enough to influence the RFP (which again, Amazon didn’t win). “However, we concluded that Mr. Ubhi’s brief early involvement in the JEDI Cloud Initiative was not substantial and did not provide any advantage to his prospective employer, Amazon…,” the report stated.

The report found Gavin did not violate any ethics rules in spite of taking a job with Amazon because he had disqualified himself from the process, nor did the report find that former Secretary Mattis had any ethical violations in its investigation.

One final note: Stacy Cummings, Principal Deputy Assistant Secretary of Defense for Acquisition and Deputy Assistant Secretary of Defense for Acquisition Enablers, who worked for Mattis, owned some stock in Microsoft and did not disclose this. While the report found that was a violation of ethics guidelines, it ultimately concluded this did not unduly influence the award to Microsoft.

While the report is a substantial, 313 pages, it basically concludes that as far as the purview of the Inspector General is concerned, the process was basically conducted in a fair way. The court case, however involving Amazon’s protest of the award to Microsoft continues. And the project remains on hold until that is concluded.

Note: Microsoft and Amazon did not respond to requests from TechCrunch for comments before we published this article. If that changes, we will update accordingly.

Report on the Joint Enterprise Defense Infrastructure (Jedi) Cloud Procurement Dodig-2020-079 by TechCrunch on Scribd


By Ron Miller

Even in the age of COVID-19, you need to stay focused on the customer

It’s easy to think, as we find ourselves in the midst of a truly unprecedented situation, that the rules of building a successful business have suddenly changed. While the world may be topsy-turvy at the moment, keeping your customer at the center of your business strategy is more important than ever.

That means finding creative ways to engage with your customers and thinking deeply about what they need as the world changes before our eyes.

As a small example on a local level, Pandemonium Books and Games in Cambridge, Massachusetts has started offering same-day delivery to neighborhoods in the Boston area for a $5 fee and a $20 minimum purchase.

This is taking a difficult situation and finding a way to stay connected with customers, while keeping the business going through difficult times. It’s something that your most loyal customers will certainly remember when we return to some semblance of normalcy — and it’s just a great community service.

When you hear from leaders of the world’s most successful technology companies, whether it’s Jeff Bezos at Amazon or Marc Benioff at Salesforce, these two executives are constantly pushing their organizations to put the customer first.

At Amazon, that manifests itself in the company motto that it’s always Day 1. That motto means they never can become complacent and always place the customer first. In his 2016 Letter to Shareholders, Bezos described what he meant:

There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.

Benioff runs his company with a similar world view, and it’s no coincidence that both companies are so wildly successful. In his recent book, Trailblazer, Benioff wrote about the importance of relentless customer focus:

Nothing a company does is more essential than how it engages with customers. In a world where online portals are replacing customer service centers and algorithms are replacing humans on the front lines, companies like ours continually need to show that the personal connections our customers craved were still — and always would be — there.

In our current crisis, that focus becomes ever more important and universal. In his last interview before his death in January, Clayton Christensen, author of the seminal book Innovator’s Dilemma, told MIT Sloan Management Review that while these organizations had other things going for them, customer centricity was certainly a big factor in their success.

They have all built organizations that have put the customers, and their Job to Be Done, at the center. They also have demonstrated the ability to manage emergent strategy well. However, they also have been in the fortunate circumstance where their core businesses have been growing at phenomenal rates, and they have had the presence of the founder to help, to personally get involved in key strategic decisions.

While you don’t want to appear like you are taking advantage of a bad situation, there are ways you can help your customers by thinking of new ways engage and help them in a difficult time. Many companies are offering services for free for the next several months to help customers get through the financial uncertainty we are facing in the near term. Others are posting free content and access to other resources on websites.

While it’s understood that some customers simply won’t have money to spend in the coming months, those that do will have different needs than they did before and you have to be ready to address them, whatever that means to your business.

This virus is going to force us to rethink about a lot of the ways we run our businesses, our society and our lives, but if you keep your customer at the center of all your decisions, even in the midst of such a crisis, you will be setting the foundation for a successful business whenever we return to normal.


By Ron Miller

Pentagon asks court for time to reconsider JEDI award to Microsoft

The JEDI contract award process might never be done. Following legal challenges from Amazon after the Pentagon’s massive, $10 billion cloud contract was awarded to Microsoft in October, the Pentagon indicated in court documents last night that it wishes to reconsider the award.

It’s just the latest plot twist in an epic government procurement saga.

Here’s what we know. The Pentagon filing is based on Amazon’s complaints about the technical part of the deal only. Amazon has said that it believes political interference influenced the awarding of the contract. However, the cloud computing giant also believes it beat Microsoft on the technical merits in a majority of instances required in the request for proposals issued by the Pentagon.

In fact, sources told TechCrunch, “AWS’s protest identified evaluation errors, clear deficiencies and unmistakable bias in six of the eight evaluation factors.”

Obviously Amazon was happy to hear this news. “We are pleased that the DoD has acknowledged ‘substantial and legitimate’ issues that affected the JEDI award decision, and that corrective action is necessary,” a spokesperson stated.

“We look forward to complete, fair, and effective corrective action that fully insulates the re-evaluation from political influence and corrects the many issues affecting the initial flawed award.”

The court granted the Pentagon 120 days to review the results again, but indicated it could take longer. In the mean time, the project is at a standstill.

On Friday, the court issued a ruling that Amazon was likely to succeed on its complaint on merit, and that could have been the impetus of this latest action by the Pentagon.

 

While the political influence piece might not be overtly part of this filing, it does lurk in the background. The president has made it clear that he doesn’t like Amazon founder and CEO Jeff Bezos, who also owns the Washington Post. As we wrote last year:

Amazon, for instance, could point to Jim Mattis’ book where he wrote that the president told the then Defense Secretary to “screw Bezos out of that $10 billion contract.” Mattis says he refused, saying he would go by the book, but it certainly leaves the door open to a conflict question.

As we previously reported, AWS CEO Andy Jassy, stated at a press event at AWS re:Invent in December that the company believed there was political bias at play in the decision-making process.

“What I would say is that it’s fairly obvious that we feel pretty strongly that it was not adjudicated fairly,” he said. He added, “I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”

We have requested comment from Microsoft and DoD and will update the story should they respond.


By Ron Miller

President throws latest wrench in $10B JEDI cloud contract selection process

The $10 billion, decade long JEDI cloud contract drama continues. It’s a process that has been dogged by complaints, regulatory oversight and court cases. Throughout the months long selection process, the Pentagon has repeatedly denied accusations that the contract was somehow written to make Amazon a favored vendor, but today the Washington Post reports President Trump has asked the newly appointed Defense Secretary, Mark T. Esper to examine the process because of concerns over that very matter.

The Defense Department called for bids last year for a $10 billion, decade long contract. From the beginning Oracle in particular complained that the process favored Amazon. Even before the RFP process began Oracle executive Safra Catz took her concerns directly to the president, but at that time he did not intervene. Later, the company filed a complaint with the Government Accountability Office, which ruled that the procurement process was fair.

Finally, the company took the case to court alleging that a person involved in defining the selection process had a conflict of interest, due to being an employee at Amazon before joining the DoD. That case was dismissed last month.

In April, the DoD named Microsoft and Amazon as the two finalists, and the winner was finally expected to be named some time this month. It appeared that the we were close to the finish line, but now that the president has intervened at the 11th hour, it’s impossible to know what the outcome will be.

What we do know is that this is a pivotal project for the DoD, which is aimed at modernizing the U.S. military for the next decade and beyond. The fact is that the two finalists made perfect sense. They are the two market leaders, and each has tools, technologies and experience working with sensitive government contracts.

Amazon is the market leader with 33% marketshare. Microsoft is number two with 16%. Number three vendor, Google dropped out before the RFP process began. It is unclear at this point whether the president’s intervention will have any influence on the final decision, but the Washington Post reports it is an unusual departure from government procurement procedures.


By Ron Miller

Jeff Bezos is just fine taking the Pentagon’s $10B JEDI cloud contract

Some tech companies might have a problem taking money from the Department of Defense, but Amazon isn’t one of them, as CEO Jeff Bezos made clear today at the Wired25 conference. Just last week, Google pulled out of the running for the Pentagon’s $10 billion, 10-year JEDI cloud contract, but Bezos suggested that he was happy to take the government’s money.

Bezos has been surprisingly quiet about the contract up until now, but his company has certainly attracted plenty of attention from the companies competing for the JEDI deal. Just last week IBM filed a formal protest with the Government Accountability Office claiming that the contract was stacked in favor one vendor. And while it didn’t name it directly, the clear implication was that company was the one owned by Bezos.

Last summer Oracle also filed a protest and also complained that they believed the government had set up the contract to favor Amazon, a charge spokesperson Heather Babb denied. “The JEDI Cloud final RFP reflects the unique and critical needs of DOD, employing the best practices of competitive pricing and security. No vendors have been pre-selected,” she said last month.

While competitors are clearly worried about Amazon, which has a substantial lead in the cloud infrastructure market, the company itself has kept quiet on the deal until now. Bezos set his company’s support in patriotic terms and one of leadership.

“Sometimes one of the jobs of the senior leadership team is to make the right decision, even when it’s unpopular. And if if big tech companies are going to turn their back on the US Department of Defense, this country is going to be in trouble,” he said.

“I know everyone is conflicted about the current politics in this country, but this country is a gem,” he added.

While Google tried to frame its decision as taking a principled stand against misuse of technology by the government, Bezos chose another tack, stating that all technology can be used for good or ill. “Technologies are always two-sided. You know there are ways they can be misused as well as used, and this isn’t new,” Bezos told Wired25.

He’s not wrong of course, but it’s hard not to look at the size of the contract and see it as purely a business decision on his part. Amazon is as hot for that $10 billion contract as any of its competitors. What’s different in this talk is that Bezos made it sound like a purely patriotic decision, rather than economic one.

The Pentagon’s JEDI contract could have a value of up to $10 billion with a maximum length of 10 years. The contract is framed as a two year deal with two three-year options and a final one for two years. The DOD can opt out before exercising any of the options.

Bidding for the contract closed last Friday. The DOD is expected to choose the winning vendor next April.


By Ron Miller