Microsoft seeking to replicate $10 billion Pentagon cloud contract success outside U.S.

Microsoft Logo at Ignite
Microsoft Logo at Ignite (Image credit: Windows Central)

What you need to know

  • Microsoft is reportedly seeking cloud contracts with foreign governments similar to its JEDI deal with the Pentagon.
  • Microsoft won the JEDI bid in a deal worth $10 billion over 10 years.
  • The JEDI contract has been challenged by Amazon and is currently tied up in a court battle.

Microsoft's winning $10 billion bid for the Pentagon's Joint Enterprise Defense Infrastructure (JEDI) contract has spurred the company to pursue potential deals with foreign governments, reports CNBC. Though the JEDI contract is currently tied up in courts after a challenge from Amazon, Microsoft reportedly sees it as a potential blueprint for "cloud-infrastructure packages similar to the bundle it assembled for the U.S. Defense Department" according to sources who spoke with CNBC.

From CNBC:

The company plans to announce the effort later this year, one person said, adding that intelligence agencies and militaries outside the U.S. might use it. Another person briefed on the work said Microsoft already has foreign cloud government contracts, despite that it has not announced the new strategy yet. It's not clear which countries Microsoft is most focused on.

Microsoft declined to comment on the matter to CNBC, but did provide the following statement:

We've worked with governments around the world on a longstanding and reliable basis for 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 push would show Microsoft doubling down on making its cloud infrastructure an appealing choice for government work. According to CNBC, Microsoft made the decision after seeing work on the JEDI contract paused by court challenges.

After winning the JEDI contract, Amazon claimed personal interference from President Donald J. Trump resulted in it losing out on the $10 billion contract. The company later sought and received an order from a judge to halt work on the contract while it challenged the bidding process in court. Microsoft and Amazon have since traded jabs as the case wears on.

Dan Thorp-Lancaster is the former Editor-in-Chief of Windows Central. He began working with Windows Central, Android Central, and iMore as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl

  • Well, in advanced countries first party and oems do not supply government directly. It is the role of small business to compete for and procure Microsoft services to government. This is actually the reason the Surface brand is a failure outside US. Microsoft does not understand how procurement work.
  • A trillion dollar company doesn't understand how procurement works. Ok, bro.
  • You know that making money and procurement is not the same thing right? No government will do business with a foreign multinational directly. For the mere fact that it opens itself to corruption or worse. Many governments have measures in place that favour local ownership, Microsoft ownership would be impossible to pen down. Any transaction has to be done through a local retailer/company with local owners. This is the reason you don't have Microsoft stores outside us. It's not allowed. Those products have to go through a value chain. Can't be coach, referee, player and goalie.
  • “This is the reason you don't have Microsoft stores outside us.” There aren’t any inside the U.S. either. And for the record, there were MS stores outside the U.S.
  • @Hiswona I have to disagree that it was due to procurement logistics that Microsoft stores there was hardly any outside the US. There are at min three primary reasons 1)Microsoft has always been crappy at marketing and that includes Retail. 2)Taxes (which is why large corporations move money around in the form of "loans" from subsidary to subsidary / "shell to shell", these are classed as "expenses" which is why they get away paying peanuts in taxes). 3)Less overheads for rising the stock price and increasing short term net profits.
  • MS is becoming PentaSoft….! Doesn't sound good...!
  • “JEDI could be the blueprint for further cloud contracts with foreign governments.” Yes, of COURSE it is. That’s why this contract was so important, and is why Amazon is STILL whining about losing it.