Defense Department officials said the cloud-computing contract is needed to allow worldwide communications among U.S. forces in different military services and commands.
The Pentagon opened a winner-take-all competition Wednesday for a multibillion-dollar cloud-services contract, a move that industry groups representing rivals including Oracle and Microsoft have said would favor Amazon.com.
While companies jockeying for a piece of the business pushed for the use of multiple cloud providers, the Pentagon announced its decision to go with a single company. The department already has difficulty moving information, particularly to the battlefield, and using multiple clouds would “exponentially increase the complexity,” Tim Van Name, deputy director of the Defense Digital Service, said on a call with reporters.
The scope of the Defense Department’s current technology needs — 3.4 million users and 4 million devices — hints at the massive size of the award. Chief Management Officer Jay Gibson confirmed that “we anticipate this will be a multibillion-dollar contract,” although the Pentagon hasn’t given an estimate of the project’s cost.
“Whichever one of you wins this, I’m challenging you to bring your ‘A Game,’ ” Air Force Brig. Gen. David Krumm, deputy director for requirements for the Joint Chiefs of Staff, told the gathering. “This is going to make a difference like few things have to get data to our war-fighters when and where he or she needs it.”
A draft request for proposals issued Wednesday sought industry input for a two-year base contract with options for renewal over eight more years. A final request would be released in early May, with a contract award as soon as September, officials told the gathering.
Cloud services — in which computing power and storage are hosted in data centers run rather than on-site — can range from powering email and storing personnel files to running complex decision-making algorithms.
The Pentagon said it’s making the shift to the cloud to strengthen its use of emerging technologies, including artificial intelligence, machine learning and the internet of things.
Having already won two other government cloud contacts, Amazon Web Services is widely perceived as the front-runner for the Defense Department award. Industry groups had called for multiple contract awards, which could improve the opportunities for companies including Oracle, Microsoft, Alphabet’s Google and International Business Machines.
Chanda Brooks, a Pentagon contracting officer, said Wednesday that market research shows that multiple companies are capable of meeting the requirements. She said the “full and open competition” would result in a single award. Van Name, of the Defense Digital Service, which recruits technology experts from the private sector for stints working on projects at the Pentagon, denied that the department is leaning toward Amazon.
“It’s about the best proposal,” he said. “We have no favorites.”
Microsoft and IBM also separately criticized the department’s decision. Microsoft said it was “disappointed,” while Sam Gordy, general manager of IBM U.S. Federal, called the move “flawed.” Google declined to comment, and Oracle didn’t respond to a request for comment.
Sam Gordy, general manager of IBM U.S. Federal, said, “The Pentagon would never limit the Air Force to flying only cargo planes for every mission. Locking the entire U.S. military into a single, restrictive cloud environment would be equally flawed.”
Underscoring the scope of the initiative, Essye Miller, the Defense Department’s acting chief information officer, said the Pentagon’s information technology covers “over 1,700 data centers and approximately 500 different cloud initiatives across the department.”
Seattle-based Amazon leads the cloud infrastructure market with 44.2 percent, followed by Microsoft’s Azure with 7.1 percent, China’s Alibaba Group with 3 percent and Google Cloud Platform at 2.3 percent, based on total cloud industry 2016 revenue, according to research firm Gartner.
Amazon already has a cloud contract with the Central Intelligence Agency dating back to 2013 that’s valued at $600 million.
The online retail giant led by Jeff Bezos has the fastest-growing lobbying arm among tech companies and has spoken to the Pentagon about cloud or procurement since at least 2016, according to federal lobbying disclosures.
Oracle has a particular interest in how the contract is awarded because it has long-term contracts with multiple government agencies that use its flagship database to store information on their own systems.
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Technology companies worried that the Pentagon favors Amazon point to the decision in early February to award a contract of as much as $950 million to REAN Cloud, an Amazon partner, to help migrate its data to the cloud.
Oracle formally protested the REAN contract in February, saying the company was opening a door for Amazon Web Services and asserting that Amazon pressures clients to use REAN, according to a person familiar with the filing.
The companies competing for the Defense Department contract are expected to put their respective strengths on display as they present bids.
While Amazon is the leader in cloud services, Google emphasizes its focus on security and Microsoft touts its ability to move existing databases onto the cloud in stages, while keeping some tasks and data in-house if the customer wants.
The transition to the cloud could threaten on-site database providers such as Oracle and IBM that have long supplied government technology products but were later entrants into the cloud market.
“For Oracle and IBM, any government contract feels important. They’re entrenched government vendors,” said Lydia Leong, a cloud analyst at Gartner. “Shifts to the cloud and going off of their architecture is not a happy situation for them.”