Return of the JEDI: Why the cloud industry is closely eyeing a big Pentagon cloud contract

The Pentagon, the headquarters of the U.S. Department of Defense. (DoD Photo)

The Department of Defense is planning to have a cloud bake-off this year, soliciting proposals from the tech industry to build a next-generation cloud infrastructure project that would bring the nation’s sprawling defense operation into the modern age of information technology. After months of whispers and speculation, DoD officials provided a little more color this week on the Joint Enterprise Defense Infrastructure (JEDI) project.

A decision won’t be made for several months. But in the interim, here’s what you need to know.

What does the Pentagon want to do?

After a visit to the West Coast last year, which included a stop at Amazon and other prominent tech companies, Defense Secretary James Mattis ordered DoD officials to prepare a plan to modernize the department’s tech infrastructure. This week, the Pentagon posted a draft of the proposal, which seeks a single vendor to provide cloud infrastructure and platform services to the military.

The services will cover both classified and non-classified operations. The Department of Defense is the largest employer in the U.S., with 1.3 million active duty service members and 742,000 civilians, and while it obviously has specific needs central to its military mission it also needs to run internal applications for payroll and project management like any other big modern organization.

James Mattis and Jeff Bezos
Defense Secretary James Mattis chats with Amazon founder Jeff Bezos during a Seattle visit. (Jeff Bezos via Twitter)

What spurred this decision to upgrade?

From the DoD’s draft Statement of Objectives:

The Department of Defense (Department)’s lack of a coordinated enterprise-level approach to cloud infrastructure makes it virtually impossible for our warfighters and leaders to make critical data-driven decisions at “mission-speed”, negatively affecting outcomes. In the absence of modern services, warfighters and leaders are forced to choose between foregoing capabilities or slogging through a lengthy acquisition, rollout, and provisioning process. A fragmented and largely on-premise computing and storage solution forces the warfighter into tedious data and application management processes, compromising their ability to rapidly access, manipulate, and analyze data at the home front and tactical edge. Most importantly, current environments are not optimized to support large, cross domain analysis using advanced capabilities such as machine learning and artificial intelligence to meet current and future warfighting needs and requirements.

Separate branches of the military and intelligence communities have been cutting their own cloud deals for years, especially after former President Obama introduced a cloud-first IT policy, but this push is designed to treat the DoD as one organization with one IT strategy.

How much money are we talking about here?

Billions. The contact is what’s known as an “indefinite delivery, indefinite quantity” contract, which means there is no real upper limit on what the Pentagon is willing to spend to modernize its IT infrastructure or how long the actual contract might last. The winner of the contract could lock up the Department of Defense’s business for a decade.

How is this different from other big cloud contracts?

Working with the federal government is both a lucrative and frustrating experience. Much has been done to improve the process by which government agencies select outside tech contractors, but it’s still a laborious process compared to the pace at which salespeople from Amazon Web Services and other cloud giants pitch and win business from the private sector.

An Army cybersecurity unit in Fort Meade, Maryland. (Photo Credit: U.S. Army photo by Steve Stover)

Wednesday’s release of the draft proposal was merely the starting point of what will be a six-month process (at best) in order to pick a cloud vendor to meet the DoD’s requirements. Actual proposals aren’t due until the end of May, and the DoD doesn’t expect to select a winner until September.

Why does the DoD want to use a single cloud vendor?

That is a good question. Despite the fact that the big trend in cloud computing deployments these days are hybrid cloud and multicloud strategies, the DoD wants to put all its eggs in one basket. This is puzzling to the tech industry, for both technical and competitive reasons, but the DoD told reporters this week that it feels a single vendor will make its operating environment far less complex.

This is also a little surprising because a lot of government IT work doesn’t go directly to the big vendors, such as AWS or Microsoft, but through smaller resellers that make decisions about which cloud vendors to use on the government’s behalf. That’s what Rean Cloud thought it had been asked to do following the award of a $ 950 million contract earlier this year, but the value of that contract was significantly reduced this week after other cloud vendors complained about Rean’s close ties with AWS.

So who is the front-runner for the contract?

Like many things in Washington, that depends on who you ask.

It’s impossible to imagine that AWS and Microsoft won’t be on the short list when it comes time to make a decision. That’s not just because they are market share and technology leaders in this world, but they also have significant experience designing cloud products for government agencies with sensitive requirements around information security.

Google has less experience at the federal government level, but meets several basic security requirements and just this week signed a deal with the U.S. military to use its artificial intelligence expertise for analyzing images captured by military drones. Depending on how that experience goes, it could be a boost for Google’s prospects for the overall cloud contract if the generals like what they see from the AI work.

Navy technicians install servers on a guided-missile cruiser. (U.S. Navy Photo / Mass Communication Specialist 3rd Class Karolina A. Martinez)

Then there are the cloud also-rans. I think it’s safe to assume that Alibaba won’t be given the opportunity to provide cloud services to the Pentagon, leaving IBM and Oracle as hopeful outsiders looking in.

If the Pentagon was interested in working with multiple vendors, it’s not unreasonable that IBM and Oracle could compete for pieces of that business. But neither company has the breadth or depth of cloud experience to provide all of the services needed by the Pentagon; Gartner ranked them quite low in the “ability to execute” category in its evaluation of the cloud industry last year.

As perhaps the only tech company enthusiastic about one of the most corrupt pay-to-play U.S. governments in recent memory, Oracle is no doubt working the refs inside the Trump administration as proposals trickle in. After he was fired from the National Security Council last year, Ezra Cohen-Watnick landed softly, taking a lobbying job with Oracle’s D.C. operation. And just this year, it has donated large sums of money to President Trump’s defenders and co-CEO Safra Catz is reportedly on the short list of candidates to replace National Security Adviser H.R. McMaster.

If the Pentagon chooses Oracle as its sole provider of infrastructure and platform cloud services from among a field of far more experienced and capable cloud vendors, taxpayers should demand an automatic review of every vendor decision the Pentagon has made under this administration.