Dod Microsoft Official

Though Amazon is an easy favorite for the Pentagon’s $10 billion JEDI contract, new reports suggest Microsoft could be in line for a cool $8 billion. As well as cloud, the Defense Department is looking to upgrade its email, calendar, and collaboration tools, and analysts say Office is the only real option.

“Microsoft is the only company that has the capabilities the Pentagon is asking for, is already widely used across the Defense Department, and has the security certifications to handle sensitive military data,” said Alex Rossino, Deltek analyst, to Nextgov. “I really don’t see another choice. Every systems integrator bidding for DEOS will be bidding Office 365.”

The contract, which spans a decade, could cover up to 3 million users. With its significant sway in the enterprise and consumer markets, Office 365 is a tool many defense workers are familiar with.

Microsoft will not be bidding to DEOS directly. A systems integration will make the offer, partnering with the tech giant, which will get licensing revenue. Analysts believe there isn’t even a close second for the bid, though Google’s G suite is one competing product.

Security Clearance Incoming

However, the Pentagon is looking at providers with Impact level 5 and 6 security certifications. Neither Google nor Microsoft has those, but the latter is expecting to meet them within the year. AWS is the only other cloud provider to meet those requirements, and not as well placed as Microsoft to offer the services.

“DEOS really is the mother of all enterprise IT contracts, it’s the largest contract you’ve probably never heard of,” explained a former senior defense official to Nextgov. “It is a massive multibillion effort to harmonize the way the Defense Department buys the main workflow tools used for defense personnel, and Microsoft is clearly the favored solution for DEOS.”

For its part, Microsoft says it’s “looking forward to competing for the DOES contract and continuing to provide the Defense Department with our latest commercial innovations”.

Earlier in the year, the company won a $1.76 billion five-year contract with the Pentagon for enterprise software, product engineering services, and source code changes. The contract provides support to the Defense Department, Coast Guard, and intelligence services.