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Microsoft scored a huge upset over Amazon when it won the $10 billion JEDI contract. Here's how seven senior tech and VC employees think it will impact the cloud wars.

Rosalie Chan

2019-12-23T19:11:12Z

Microsoft CEO Satya Nadella Kim Kulish/Corbis via Getty Images

In October, Microsoft won the Joint Enterprise Defense Infrastructure (JEDI) contract in a bidding race where Amazon Web Services was thought to be the favorite.
AWS is currently challenging Microsoft's win citing "technical superiority" and political interference, but industry analysts say Microsoft won on its own merits.
Here's what seven employees in tech and venture capital say about how JEDI will impact the cloud wars.
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In October, Microsoft scored a major upset over Amazon.

It won the coveted $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract, which would help the Department of Defense move its sensitive data onto the cloud. Amazon Web Services was considered the frontrunner to that race, and immediately after, it started "evaluating options."

Indeed, it has filed a legal challenge and says it should have won because of "technical superiority" that Microsoft "could not match."

Industry analysts said this win puts Microsoft in the same league as AWS and serves as a "wake-up call" for AWS. Still, AWS CEO Andy Jassy reportedly told employees that its cloud is two years ahead of Microsoft. He also said at a press event at its mega-conference AWS re:invent that the company feels strongly that JEDI "was not adjudicated fairly" because of political interference.

The road to Microsoft's JEDI win faced some obstacles. President Donald Trump reportedly said he wanted to intervene in the bidding process and has a public feud with Amazon CEO Jeff Bezos. Oracle also delayed the award with legal challenges.

Despite the politics that was involved, experts say Microsoft won on its own merits and will still walk away with the JEDI deal. Unsurprisingly, Microsoft agrees, as a spokesperson said it believes "the facts will show they ran a detailed, thorough and fair process in determining the needs of the warfighter were best met by Microsoft."

Whatever happens, it's likely to leave a major impact on the cloud industry as a whole.

With all this at play, we asked 7 employees in tech and venture capital about how Microsoft's JEDI win will impact the cloud wars.

Howard Ting, CMO of Redis Labs: 'JEDI is the most visible loss for AWS.'

Howard Ting Redis Labs — Howard Ting, CMO of Redis Labs Redis Labs

"JEDI is the most visible loss for AWS...Now it's a 2.5 horse race. We may look back at the JEDI contract as a turning point as Azure becomes a stronger competitor. Maybe it will overtake AWS down the road."

Ben Narasin, venture partner at New Enterprise Associates: Microsoft 'finally has a realistic chance.'

"It will help Microsoft enormously. That's the best thing that happened to them. Microsoft through my lens has made a very aggressive push. The US military is as high as you can get. It finally has a realistic chance. It's a two horse race instead of a one horse race with a pony waiting on the side."

Craig Adams, senior vice president and general manager at Akamai: 'It legitimized Azure more than any individual customer's reference ever could.'

Craig Adams Akamai — Craig Adams, senior vice president and general manager at Akamai Akamai

"It legitimized Azure more than any individual customer's reference ever could. What I can say was that it was a giant stamp of legitimacy for Azure that will cost AWS more than the contract ... There's a perception among many that AWS is the default leader. This allows Azure to claim they're the default leader."

Ken Hui, senior solutions architect at Rubrik: 'For Microsoft, it gives them another way of catching up to AWS.'

Kenneth Hui Rubrik — Ken Hui, senior solutions architect at Rubrik Rubrik

"I don't think it's over. I don't know what will happen. When I talk to people, they're very surprised the government would choose one cloud ... It's not even so much JEDI. When Azure goes ahead and wins it, it lets them get into all parts of the government. For Microsoft, it gives them another way of catching up to AWS."

Deepak Mohan, executive vice president of data protection products at Veritas: 'I don't think it will have any impact'

Deepak Mohan Veritas — Deepak Mohan, executive vice president of data protection products at Veritas Veritas

"I don't think it will have any impact. These are mega giant companies. One contract doesn't make a difference...I don't think 12 months from now, we'll be hearing about it."

Arman Dadgar, co-founder and CTO of HashiCorp: 'There's a super good argument to divide among multiple cloud providers.'

Armon Dadgar HashiCorp — Armon Dadgar, co-founder and CTO of HashiCorp HashiCorp

"The context is NSA already operates in AWS. There's a tension within the DOD. Do you go all in on AWS or do you diversify and support multiple cloud providers? ... There's a super good argument to divide among multiple cloud providers and a super compelling argument for multi-cloud. It's a good thing that it's not a split market. It ends up being better for the market and we can leverage and get better deals on both sides."

Trifacta CEO Adam Wilson: 'It will shift more focus to Azure.'

"Historically there was a lot of focus around Amazon and AWS. Certainly with a transformational contract like that, it will shift more focus to Azure. That certainly was a signal to the market that multi-cloud is important in thinking about the public sector. A contract of that size and that significant won't go down without a lot of appeals. As the space becomes increasingly competitive, it's a win for customers."

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