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Microsoft, IBM Team With Oracle To Lobby Against AWS Winning Entirety Of Pentagon Cloud Contract: Report

Microsoft, IBM, Dell and HPE all are urging the Pentagon to abandon a presumed winner-take-all, multi-billion contract for AWS. Oracle launched the effort after REAN Cloud, an AWS partner, won a lucrative cloud modernization project.

A coalition of tech giants has formed around Oracle's efforts to torpedo a deal they expect will deliver to Amazon Web Services the entirety of a massive U.S. Department of Defense contract for cloud computing services, Bloomberg reported Friday.

Microsoft and IBM, two of Amazon's most-prominent cloud rivals, as well as hardware giants Dell and Hewlett Packard Enterprise, all want a piece of the looming contract. Those companies are joining Oracle in lobbying the federal government against prematurely selecting AWS, and to break up the award for multiple vendors.

Oracle launched its campaign with a formal protest last month after REAN Cloud, a close AWS partner, announced a nearly $1 billion contract to speed the defense department's cloud adoption strategy.

[Related: Cloud Computing: Now A $180 Billion Market]

The total contract for the Joint Enterprise Defense Infrastructure (JEDI) cloud initiative, which defense officials say will be awarded around September to a single vendor, promises billions in federal spending.

Oracle's campaign, as reported by Bloomberg, involves coordinating efforts with allies in the tech world, as well as a comprehensive media strategy and the lobbying of government leaders, defense officials and the Trump Administration.

Oracle, IBM and Microsoft are opposing the "winner-take-all" nature of the contract, believing the Pentagon should opt for a multi-cloud investment, according to Bloomberg.

The defense spending controversy swirls around REAN, a Herndon, Va.-based solution provider that implemented a prototype migration last year for U.S. Transportation Command —a project that won the 2017 DoD CIO Cyber and IT Excellence Award.

On Feb. 7, REAN announced it had won a five-year contract, capped at $950 million, for a migration project involving implementation of a custom solution for automating the military's procurement of cloud resources while maintaining price stability.

Oracle responded by lodging an official protest through the Government Accountability Office. It argued the procurement process violated government procedures to ensure competitive bidding because the Defense Department selected an implementation partner before deciding on the cloud provider that would host those workloads.

Soon after, the Pentagon said REAN's deal had been drastically reduced to cover only the pilot Transportation Command project, with a maximum price set at $65 million.

REAN managing partner Sekhar Puli, in a prepared statement, dismissed Oracle's complaints and threat of legal action, as a protest "by the old guard."

Puli said further delay in modernizing defense infrastructure benefited "those large companies that stand to lose money if the DoD proceeds with innovation."

In a prepared statement, Oracle Senior Vice President Ken Glueck said: "Of course Oracle is interested in competing for the DoD cloud contract and we are equally interested in the mission success of the DoD. The best way to ensure mission success is to have an open competition, allowing DoD to choose from many competing, innovative, modern, secure cloud architectures."

Amazon, the industry's largest cloud service provider, didn't immediately comment on the latest report of mounting opposition to it being chosen the sole recipient of the lucrative contract.

Earlier this month, Oracle co-CEO Safra Catz raised concerns around the issue directly to President Trump at a private dinner, according to an earlier Bloomberg report.

That discussion raised eyebrows because Catz brought the controversy directly into the White House amid the backdrop of a series of contentious comments the president has made against Amazon around its bulk delivery deal with the U.S. Postal Service.

Amazon backers say President Trump is using the postal issue as a proxy to take on Amazon CEO Jeff Bezos because of Bezos' ownership of the Washington Post, a newspaper the president has repeatedly criticized as being unfair to his administration.

"We have no favorites. We want the best solution for the department," Pentagon spokesperson Navy Commander Patrick Evans, said in response to news of the discussion Catz had with the president.

REAN's original contract was to implement an automated procurement system with firm fixed-pricing, helping DoD agencies achieve efficiencies in running their IT infrastructure, developing applications and handling highly sensitive data. REAN would also offer consulting services to the agencies as they worked to meet complex and mission-critical infrastructure needs

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