UPDATED 20:13 EST / AUGUST 23 2020


Microsoft looks to secure more cloud contracts with foreign governments

Microsoft Corp. is eyeing more cloud computing deals similar to the $10 billion Joint Enterprise Defense Infrastructure contract it won from the U.S. Department of Defense last year.

The company is targeting foreign governments with similar initiatives as it looks to expand its “cloud-based computing and storage resources at all government security classification levels,” CNBC said in a report Friday.

Under the JEDI contract, Microsoft will provide the Pentagon with an extensive cloud computing infrastructure and access to secure, offline devices. The idea is to link together the Pentagon’s various military systems under a single, unified architecture. In addition, JEDI will enable the Pentagon to test and deploy various artificial intelligence technologies.

Work on the JEDI project has been on hold because of an ongoing legal challenge by Amazon Web Services Inc., which says its rival bid was unfairly snubbed by U.S. President Donald Trump’s administration. CNBC said Microsoft is now focused on brokering deals with foreign governments that have similar classified cloud computing needs while it awaits the outcome of the JEDI dispute.

The plan is reported to be part of a strategy by Microsoft to widen its cloud infrastructure business by targeting public sector needs abroad while still maintaining its close relationship with the Trump administration, CNBC said. That relationship has also helped Microsoft to broker a possible acquisition of the popular, ByteDance Ltd.-owned app TikTok.

Microsoft declined to comment directly on CNBC’s report, instead talking about how it has worked with various governments around the world for more than four decades.

“We have government customers using our products to enhance their services with the latest in commercial innovations, deeply engage and connect with citizens in powerful ways, and empower government employees with the modern tools they need to be more efficient and effective, and to give them time back to focus on their agency mission,” the company said in a statement.

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE that Microsoft’s desire to win more government cloud contracts underscores the importance of the JEDI contract award, since it provides a great reference for other customers. There are also synergies in providing the same services to allied governments bound to the U.S. by common treaties, he said.

“Microsoft already has strong relations with governments thanks to its Windows and Office franchises,” Mueller said. “So it’s no surprise that its cloud is also coming to government, and that includes the military. With AI playing a key role in every aspect of modern operations, it will play a key role in the military use cases as well.”

Microsoft is well-placed positioned to win more government cloud contracts as its secure Azure Government Cloud offering has been up and running since 2017. In addition to the JEDI contract, it also won a smaller, $1.76 billion deal to provide information technology consulting and support services to various branches of the Department of Defense in January 2019.

Photo: efes/Pixabay

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