Amazon and Microsoft: Cloud Computing in US Defence

By Elise Leise
The Pentagon cancelled a US$10bn Microsoft contract—so we’ve examined the future trends of military cloud computing

Cloud computing is available to anyone with a smartphone. Yet for the past few years, it hasn’t been fully available to the US military. After the Pentagon awarded a US$10bn cloud computing contract to Microsoft—causing much debate—several leading companies criticised the single-award approach and brought legal action. Oracle claimed that illegal, or at least unsavory, relationships tipped the scales: it was well-known that President Trump and Jeff Bezos butted heads on major issues, which may have cut Amazon out of the deal from the start. 

Now, however, the US military has changed its system so that it can award cloud computing contracts to multiple companies. The new approach ‘is an opportunity we must take’, said John Sherma, the acting CIO of the Department of Defence. ‘[The US.] must use all the arrows in its quiver’. While this is a major blow for Microsoft, the company supported the decision in a recent statement. As CEO Toni Townes-Whitley said: ‘The security of the United States is more important than any single contract’. 

What’s Next for Military Cloud Computing? 

The US needs to upgrade its cloud computing capabilities if it wants to prepare itself for the next decade of warfare. Our biggest threats are now digital: corporate ransomware, national cyberattacks, hackings of voting results. Moreover, as the way we fight changes—drones rather than droves of men—the methods used must follow suit. 

This year, GlobalData identified at least five critical trends of cloud computing.

  • Mobility. Cloud computing edge systems help cut down on the time it takes to analyse and communicate information. When one’s opponents are equally technologically capable, even seconds count. The more quickly troops have access to enemy movements, the better. 
  • Standardisation. This helps explain a bit of why the US military originally awarded its cloud defence contract to Microsoft alone—militaries don’t want to silo off their information.The single-award system was supposed to simplify the Pentagon’s fragmented information divisions. 
  • Localisation. Militaries usually develop their cloud systems on infrastructure that they could physically protect and control. But as cloud service providers like Amazon and Microsoft open up data centres around the world, cloud computing no longer needs to stay within domestic borders. 
  • Onboard Data Analysis. Sensors and platforms will have to do their part, partially analysing data before passing it to the cloud. This, along with edge computing, is part of a larger movement to speed up the way we get data. 
  • Security. Amazon (at the time of the original contract) was the only company that could technically hold top-secret data. Firms will now have to deal with cybersecurity attacks, deepfakes, and other information that could mislead top military officials. 

The Future of the Contract 

Given that Amazon is a recognised leader in cloud computing, most people were shocked when Microsoft was awarded the contract. Now the years have passed and the Pentagon’s priorities have shifted. Its top officials are increasingly worried about China-US tensions, realising that dual- or multi-sourcing tactics help prevent defence disasters. And many are tired of litigation. ‘We’ve been waiting around because of this bureaucratic procurement process, which in my view was flawed at the outset’, said Arnold Punaro, a retired Marine Corps general

Going forward, multiple firms will toss in their bids as political scuffles disappear from the process. Just in time: the government is ready to move forward into the future of information tech. Said Punaro: ‘The troops expect to have information at their fingertips, and that information comes through the cloud’. 


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