In scrapping its $10 billion JEDI cloud computing contract earlier this week, the U.S. Department of Defense surprised no one except perhaps Microsoft Corp., which appeared to have stolen the deal from front-running Amazon Web Services Inc. nearly two years ago.

With its reliance on a single cloud provider and a decade-long horizon in a market characterized by rapid change, the DOD was going against the grain of other government agencies, the majority of which are using multiple clouds, experts said. The Joint Enterprise Defense Infrastructure project was also tangled up in multiple legal challenges from the likes of AWS and Oracle Corp. that, while not unusual, were slowing progress.

“There’s been a lot of rumbling that they were losing patience with the process and just wanted to get on with it,” said Alex Rossino, a federal market research analyst at Deltek Inc., a maker of software for project-based industries.

Paradoxically, killing JEDI may accelerate the modernization process the contract was intended to address. The project’s replacement, called the Joint Warfighting Cloud Capability, is shorter and more open and should adapt more easily to changes in technology and markets, experts said.

Chief among them is the flexibility to work with multiple cloud vendors, a trend that has accelerated since the JEDI specification was released in 2018. Ensono LP’s most recent Cloud Clarity survey of 500 cloud procurement decision-makers found that 52% of public sector respondents are adopting a multicloud approach, according to Clint Dean, vice president of the state and local government team for North America at Ensono.

“There’s no one-size-fits-all solution or public cloud provider for the public sector, and the DOD’s decision to abandon JEDI is evidence of this,” he said.

On second thought

It isn’t unusual for government agencies to cancel contracts that have already been awarded. The U.S. General Accounting Office logged more than 2,000 protests in 2020 alone. “What’s unusual is that this contract was so long and so big,” Rossino said. Even so, larger deals have been pulled back, most notably Boeing Co.’s successful challenge of a $30 billion U.S. Air Force plane refueling contract that had originally been awarded to Northrop Grumman Corp. and Airbus SE a decade ago.

The winner-take-all nature of the deal contributed to the drama around it. AWS and Oracle litigated the decision for more than a year and even former president Trump weighed in against an award to AWS.

“The deal was well-suited and perfectly designed for AWS and it was a very good design,” said John Furrier, CEO of SiliconANGLE, who has interviewed more than 20 Capitol Hill insiders about the project. “No other vendor was qualified technically and they all knew it.” However, Oracle and Microsoft conducted what Furrier described as a “smear campaign,” the goal of which was for “AWS not to win,” he said.

“Resubmission will be a face-saving face way for AWS to win their, portion then the DODwill give a non-critical component to someone else,” he said. “Multicloud isn’t viable for tactical edge AI. Everyone knows that.”

The DOD learned from the experience, experts said. “It would have been better to create a vendor-agnostic contract that was spread across multiple vendors,” said Tracy Woo, a senior analyst at Forrester Research Inc. “That would have created a less incendiary environment and would also mean that the government could be less vulnerable to a catastrophic failure if the one vendor failed.”

Shortly after canceling the deal this week, the DOD quickly announced that individual contracts would be awarded to AWS and Microsoft, but that other cloud vendors would have until July 20 to submit “capability statements” to the new Joint Warfighting Cloud Capability contract office.

Making up for lost time

The speed with which the department changed course should help make up for lost time, said Dan Stroman, senior director of public sector at CloudCheckr Inc., a maker of cloud visibility and management software. “Despite the delay, the DOD is sending clear signals that they’re acting with speed and efficiency, making sure that they can modernize on the most important things to ensure defense readiness,” he said.

Opening up bidding to other parties should also help move things along, most experts agreed. “Getting more people on board will make it easier to move forward,” said Ian Campbell, chief executive of Nucleus Research Inc. “Any downside of delays will be overcome by the upside of consensus.”

But David Vellante, chief analyst at SiliconANGLE sister market research firm Wikibon, wasn’t so magnanimous. “What will slow this down is increasing integration complexity with multiple vendors,” he said. “It’s more technology, more integration points and more security exposure.”

Vellante asserted that the delays cancellation will cause in getting artificial intelligence-based real-time analysis to the battlefield, “means the winner here is China. It’s good for them and bad for America.”

He also differed with other experts on the wisdom of awarding the contract to a single cloud supplier, saying a one-throat-to-choke approach would be both more cost-effective and secure. And he dismissed speculation that the DOD was worried about being locked into a single cloud provider.

“Why worry about lock-in when we’re talking about the defense system? Are you kidding me?” he said. “Defense systems are the mothers of all lock-in. Just keep it streamlined and pick one vendor.”

A head-scratching decision

But others said DOD officials may have dodged a bullet by retreating from contract terms that were increasingly out of step with those of other government agencies and even the Pentagon itself.

When JEDI was put out for bid in 2018, “a lot of people were scratching heads about why DOD decided to take a single-vendor approach after other contracts had gone multicloud,” said Deltek’s Rossino. He pointed to the department’s recently released Outside the Continental United States (Oconus) Cloud Strategy, which emphasizes robust edge computing capabilities and access to information from multiple devices and data sources. “Oconus places a much greater emphasis on decentralized global cloud, and some may have seen that as out of step with JEDI,” Rossini said.

The new Joint Warfighting Cloud Capability project is intentionally multivendor and half the length of JEDI. “By keeping up with the speed of modernization and not locking themselves into one long-term deal, the DOD’s decision is promoting innovation in the cloud space,” Stroman said.

The shorter timeline also “makes it less of a hot button contract to win,” said Forrester’s Woo, meaning that legal challenges are less likely to slow down implementation.

The short timeframe gives the Pentagon more leeway to modify the project to accommodate new entrants and technologies, something that was more difficult within the original decade-long timeframe. The department “is setting itself up to reevaluate in five years and ensure that its cloud infrastructure is always up to par with the market,” said Ensono’s Dean.

A decade in cloud technology is an eternity, noted Nucleus Research’s Campbell. “Think of it: 10 years ago nobody knew what bitcoin was and IBM was barely a player in cloud,” he said. “Making a 10-year decision on a market that’s moving this rapidly doesn’t make much sense.”

And priorities do change. Personnel changes under a new administration can shift once-prominent projects to the back burner. Rossino recalled the Joint Information Environment, a 2013 initiative that was intended to unify information technology infrastructure across branches of the military. As little as four years ago it was “the gem of DOD aspiration and today it’s a footnote,” he said.

He suggested that Oconus is a better indication of how the Pentagon is now thinking about the cloud. “It goes far beyond standing up cloud,” he said. “There are network services, software-defined networking, identity and access management, and containerized data centers. The concept is far more varied than just providing infrastructure service to the DOD.”

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