Microsoft has been handed an $8 billion U.S. Military contract, beating out competition from Google in the process. With the partnership, Microsoft will supply the back-end office support for the US Defense Department.
In truth, it was unlikely Google was ever going to win the Defense Enterprise Office Solutions (DEOS) contract. Microsoft's experience and services just outweigh Google's G-Suite, which are much more reliant on connectivity.
It is worth noting Microsoft is a third-party beneficiary of the contract as OEM companies are servicing the deal. Many bidders were awarded the contract, but Microsoft is the main beneficiary as it supplies the underpinning software.
An announcement from the Department of Defense and General Services Administration revealed CSRA LLC and its contractor teaming partners Dell Marketing L.P. and Minburn Technology Group LLC, won the contract. In other words, Microsoft can celebrate because each will use Office 365 as their software.
The Defense Enterprise Office Solutions (DEOS) contract will run for 10 years and replace legacy productivity software at the DoD.
“DEOS will streamline our use of cloud email and collaborative tools while enhancing cybersecurity and information sharing based on standardized needs and market offerings,” Department of Defense Chief Information Officer Dana Deasy said in a statement.
While Google was involved in the bidding process, it seems a pointless pursuit. Indeed, many analysts questioned whether the company could even gain the relevant certifications before the announcement.
Microsoft is seeking to tie up the JEDI cloud computing $10 billion contract with the Pentagon. While the company faces stiffer competition from Amazon Web Services, the decision has not been made. Microsoft will hope its existing contracts with the DoD will stand the company in good stead.
The race for the $10 billion cloud contract is between Amazon Web Services and Microsoft Azure, but there have been increasing concerns about the project in recent months. Oracle is taking legal action over the project. The company argues Amazon has a former Defense Department official working for it, which is a potential conflict of interest. Amazon has played down the significance, saying Oracle has “exaggerated that employee's role in the procurement”.
Numerous cloud companies, Oracle among them, have argued JEDI should be a multi-vendor project.