The goal of the coalition — which people close to the matter say includes Oracle, Microsoft and IBM — is to make sure that the Pentagon award process is opened up to more than one company and unseat Amazon as the front-runner for the multibillion-dollar deal.
Oracle is leading a campaign in Washington, D.C., to prevent Amazon from winning a lucrative Defense Department computing contract that’ll be awarded in coming months, according to three people familiar with the matter.
The Oracle-led effort relies on a loose coalition of technology companies also seeking a slice of the Pentagon work, including Microsoft and International Business Machines, said the people, who described the matter on condition of anonymity. Dell Technologies and Hewlett Packard Enterprise are also participating, said one of the people.
Their goal is to make sure that the award process is opened up to more than one company and unseat Amazon as the front-runner for the multibillion-dollar deal. As part of the campaign, the people said, Oracle is holding regular calls with tech allies, courting trade and mainstream media and lobbying lawmakers, defense officials and the White House.
The tech companies are jockeying for a piece of the Pentagon’s cloud business, which will provide a rich revenue stream and give the winner an edge in government cloud computing. Oracle has long-term contracts with many departments that use its flagship database to store information on their own systems. As the agencies look to switch to cloud computing and eye market-leader Amazon, Oracle’s traditional revenue sources could be under threat. Oracle has tried to protect its database business by offering cloud services of its own, but has come late to that market.
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The Pentagon has said it intends to move the department’s technology needs — 3.4 million users and 4 million devices — to the cloud, indicating the massive size of the award. Pentagon officials, including Defense Secretary Jim Mattis, have repeatedly said no decision about the winner-take-all contract has been pre-made and that bids will be considered on their merits, with an award to a company or a team of companies expected in September. But Amazon’s dominant market share in the cloud-contracting business is seen by many analysts as giving it a significant advantage in the competition.
“Of course Oracle is interested in competing for the DoD cloud contract and we are equally interested in the mission success of the DoD,” said Oracle’s Senior Vice President Ken Glueck in a statement. The best approach “is to have an open competition, allowing DoD to choose from many competing, innovative, modern, secure cloud architectures,” Glueck said.
IBM said in a statement it has been advocating for a multi-cloud approach for months, without commenting on whether it’s involved in an Oracle-led coalition.
Pentagon acquisition chief Ellen Lord said the competition is fair and open and that the department continues to have multiple cloud contracts.
“No decisions have been made and we are working with a variety of companies,” Lord said. “I see no focus toward one company whatsoever.”
Amazon, Microsoft and HPE declined to comment. Dell said it competes with Oracle on hardware products but collaborates to make sure their products can be used together, and declined to comment about whether it’s working with an Oracle group.
While Oracle’s $187 billion market value is less than a third of Amazon’s, it punches way above its weight in Washington, where it has a team of seasoned policy officials and personal relationships that go all the way up to President Donald Trump.
Oracle’s Co-Chief Executive Officer Safra Catz was an early supporter of Trump, and days after he won the election, Catz visited the president-elect at Trump Tower in New York and subsequently served on the executive committee of his transition team. Trump’s inner circle also had shown interest in Catz and spoken with her about the positions of U.S. Trade Representative and the Director of National Intelligence, according to people familiar with the matter.
Catz also joined the American Technology Council, a White House effort headed by onetime Microsoft finance chief Chris Liddell to seek the private sector’s input on modernizing the federal government’s technology among other issues.