Microsoft has won dramatic competition in a cloud-computing deal for the Pentagon, defeating market leader Amazon Web Services with a contract worth up to $ 10 billion over a decade, the Pentagon said Friday. .
After the announcement, Microsoft shares rose 3% in extended trading, while Amazon shares fell less than 1%.
This achievement highlights the emergence of Microsoft's Azure cloud service as a true competitor to Amazon Web Services, and represents Satya Nadella's latest victory as Microsoft's successor to Steve Ballmer in 2014. The company has also won major cloud infrastructure deals from companies. Like Walmart even as Amazon's Web services continue to grow.
If the defense infrastructure joint venture, known as JIDAI, ends up being worth $ 10 billion, Microsoft is likely to represent a bigger deal than Amazon would have.
Microsoft does not disclose revenue from the Azure cloud service, but is widely believed to have a lower market share than Amazon, which received $ 9 billion in revenue from Amazon Web services in the third quarter.
Early in the competition for the deal, Amazon was seen as the preferred option, in part because Amazon Web Services won a deal with the CIA in 2013. Amazon is also licensed to the highest level of security clearance, in The time Microsoft was trying to catch up.
Bidding for other competitors in cloud services such as IBM and Oracle was ignored early in the competition, which was disputed and delayed.
In July, US President Donald Trump said he was reviewing the contract after companies protested the bidding process.
Although Trump did not cite Amazon CEO Jeff Bezos by name at the time, Bezos was a constant source of frustration for the president, according to CNBC.
Bezos owns the Washington Post, which Trump has consistently criticized for reporting on his administration.
Widbosch analyst Dan Ives described the deal as "going to change the game" for Microsoft, and wrote in a note to clients that the deal would have a "sequential impact" on Microsoft's cloud business for years to come. Court.
"We were surprised by this result," a CNBC spokesman quoted Amazon Web Services as saying in an e-mail. "Amazon Web Services is the open leader in cloud computing. A detailed evaluation of comparative offers will clearly lead to To a different result, "while Microsoft did not immediately respond to a request for comment.