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Microsoft just took an important step to take on Amazon for a crucial $10 billion cloud contract

satya nadella
Microsoft CEO Satya Nadella. Getty Images

  • On Wednesday, Microsoft announced that Azure Government Secret, its government cloud for storing classified information, had met requirements for Impact Level 6, or IL6, the highest security certification from the Department of Defense.
  • Should Azure Government Secret win accreditation, it could help Microsoft in its bid for the winner-take-all $10 billion Joint Enterprise Defense Infrastructure contract with the Pentagon.
  • Amazon is the only company that has achieved the IL6 accreditation — meaning that right now it's the only cloud that can handle the Department of Defense's most classified data. That gives it a big edge in the JEDI fight.
  • Microsoft also announced that six of its Azure Government regions now have IL5 capabilities.
  • Visit BusinessInsider.com for more stories.

Last week, the Department of Defense narrowed the competition for a $10 billion cloud contract to two players: Amazon Web Services and Microsoft. Now, Microsoft is gearing up to make itself more of a contender.

On Wednesday, Microsoft unveiled some updates to take it one step closer to being on par with Amazon Web Services as it competes for the Joint Enterprise Defense Infrastructure contract, a $10 billion winner-take-all Pentagon contract to move its sensitive data to the cloud.

Microsoft announced that Azure Government Secret, its government cloud for storing classified information, had two new US data centers built to meet the requirements of Impact Level 6, or IL6, the highest security certification from the Department of Defense. It also said it met the requirements of a directive from the director of national intelligence.

However, while these new facilities meet the requirements, they're not yet accredited. Microsoft said it was "working closely" with its government partners to achieve both accreditations.

"From our facilities to our systems to our personnel, we followed the strictest adherence to the requirements to support data at Impact Level 6," a Microsoft representative told Business Insider.

Amazon is the only company with an IL6-certified product, its Secret Region cloud. That puts Amazon in a better position to win the JEDI contract, so there's a lot riding on whether Microsoft can get accredited before the deal is awarded.

Overall, analysts have said that AWS is the frontrunner for winning JEDI, though Microsoft has made significant improvements that could help snatch it out of the hands of Amazon.

Read more: Oracle and IBM are officially out of the race for a key $10 billion defense cloud contract as Amazon and Microsoft move ahead

Microsoft said Government Secret would be available in private preview for customers on a case-by-case basis during the accreditation process.

Microsoft also announced that all six of its Azure Government regions now have IL5 capabilities, the second-highest level. Before, only two regions did.

"For more than 40 years we have prioritized bringing commercial innovation to the DoD," Lily Kim, the general manager of Azure Global at Microsoft, said in a statement. "We also continue to help our customers across the full spectrum of government, including every state, federal cabinet agency, and military branch, modernize their IT to better enable their missions."

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