Amazon's black streak: the 10 billion Pentagon contract goes to Microsoft
Microsoft has bypassed Amazon in the fight for a $ 10 billion military contract. The brainchild of Bill Gates will now develop cloud-based military storage infrastructure for the Pentagon.
The announcement of the agreement, which appeared on the website of the US Department of Defense, came as a surprise: until the last moment, Amazon was considered the absolute favorite among the bidders, and the platform of the Internet giant Web Services was the recognized leader in cloud computing.
IBM and Oracle claimed the Pentagon contract. And Google declined the tender, saying it did not want its artificial intelligence to be used for military purposes.
Amazon is already supplying equipment to the CIA and other US agencies. And Microsoft provides US Immigration and Customs Enforcement with programs to combat illegal immigrants.
Earlier, US President Donald Trump spoke unflatteringly about Amazon CEO Jeff Bezos more than once and, according to the NYT newspaper, could have influenced the Pentagon's decision.
Since the contract is awarded on a segment-by-segment basis, Amazon is not out of the game, says Daniel Guret, vice president of the Lexington Institute, Washington, DC, a defense think tank. “The Pentagon may work with the second company in the future, whenever it suits them.
In early August, the Department of Defense said it was delaying the review of applications by reappointed Defense Secretary Mark Esper a few weeks after President Trump publicly expressed concern about competitor complaints that the application was rigged for Amazon. Trump's interest in the contract has come as a surprise given his frequent attacks on Amazon CEO Jeff Bezos, who also owns The Washington Post.
Some critics have warned that there may be a security risk of having a single cloud provider for all branches of the military as well as the CIA.
Amazon's operating income fell from $ 3.7 billion to $ 3.2 billion in Q3 2019. Net income for the period fell to $ 2.1 billion from $ 2.9 billion in the same reporting period in 2018.
Amazon's report disappointed investors. After the release of the report, the company's shares fell by 7%. Jeff Bezos's fortune in the Forbes Real-Time ranking, which is updated in real time, has dropped from $ 103.9 billion. As a result, he moved from first to second place in the Forbes Real-Time list of the richest people in the world. In the first place is now - Microsoft co-founder Bill Gates. His fortune, according to Forbes Real-Time, is estimated at $ 105.7 billion.