![]() ![]() In 2016, for example, the company signed a deal worth almost a billion dollars to help move the entire department to Windows 10. ![]() It could open the door for Microsoft for a much more lucrative government cloud business.īut it’s not as though Microsoft didn’t already have a lucrative cloud business. If you could modernize the DoD’s infrastructure, the argument goes, chances are you could do the same for other areas of the government. If the value of this deal was not the contract itself, it begs the question, why did everyone want it so badly? The $10 billion JEDI deal was simply a point of entree. Putting the Pentagon $10B JEDI cloud contract into perspective Given the shifting sands of technology, that part of the strategy was a wise one. ![]() It didn’t want to be inextricably tied to one company for a decade if that company was suddenly disrupted by someone else. The DOD recognized that with the unique nature of this contract, going with a single vendor, it wanted to keep its options open should the tech world shift suddenly under its feet. Then there are a couple of three-year options, with a final two-year option at the end if it gets that far. The deal is actually initially guaranteed for just two years. What’s more, it’s possible it might not even be worth that much if the government uses one of its out clauses. What we have here is a contract that’s worth a billion a year. Synergy Research pegs the current cloud infrastructure market at well over $100 billion annually (and growing). It reported around $11 billion in cloud revenue. Microsoft reported $33 billion last quarter in total revenue. In a victory over Amazon, Microsoft wins $10B Pentagon JEDI cloud contractīefore we get too crazy about Microsoft getting a $10 billion, 10-year contract, consider that Amazon earned $9 billion last quarter alone in cloud revenue. ![]()
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