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The Force May Be With Microsoft

By Denis Pombriant E-Commerce Times ECT News Network
Nov 2, 2019 4:00 AM PT
microsoft has won the coveted $10 billion pentagon jedi contract but court challenges are likely

The Pentagon last week awarded its US$10 billion contract for cloud computing to Microsoft. The program -- which goes by the acronym "JEDI" for "Joint Enterprise Defense Infrastructure" -- has been attracting vendors like a dog attracts fleas for several years. It has been marked by fierce litigation too, so the award may not be the end of it.

Oracle sued over the process, claiming it was unfair. It focused its ire on Amazon, which appeared to be the leading candidate. CTO Larry Ellison made a point of showcasing the benchmarks of Oracle's Autonomous Database against Amazon at multiple OpenWorld conferences to show Oracle's technical dominance.

Amazon had been making a market share argument along the lines of "we have the most datacenters so we're the best." Cloud computing is a three-legged stool, though, and you need infrastructure, software and tools to be a real contender.

Thumb on Scale?

Then Donald Trump got involved, as only he can as the commander in chief. There's no love lost on Trump's part for Amazon CEO Jeff Bezos, who also owns The Washington Post. Trump dismisses the paper as the "Amazon Washington Post," making a not-so-sharp distinction from his description of the "failing New York Times."

"An upcoming book on James Mattis' tenure as secretary of Defense claims President Donald Trump told Mattis to 'screw Amazon' out of a $10 billion cloud contract for the Pentagon," wrote James Feuer in a CNBC article published last week.

Mission accomplished, I guess. If true, that looks like self-dealing rather than putting the concerns of national security first and foremost, but I digress.

More than all the gossip about who gets the contract, there ought to be questions about what the contract will do to shape the cloud industry. Where to begin?

Microsoft and Who Else?

First, is Microsoft the only contractor in this deal or is it the prime? The difference could be big. If the company founded by Bill Gates and Paul Allen is the prime, it leaves the door open for the losers in the derby to make strategic contributions.

For instance, it defies logic to think that the Oracle Autonomous Database would be excluded from delivering its functionality for national defense. In my humble opinion it is the most performant and secure thing in the cloud, and I say this not to dispute other products' greatness but only to point out that Oracle has delivered a hardware and software solution to market that achieves that purpose.

This brings up a thorny issue. To get the most out of Oracle's technology, you really have to buy its Exadata storage system and maybe some other pieces. It's a standard part of the Oracle cloud system now being deployed, but it might raise concerns about vendor lock-in for a customer that likes to have no single point of potential failure. For Oracle to get a piece of the contract, it might have to bend a little by making its solution more open.

That's not far-fetched. Oracle and Microsoft have been cozying up this summer, with grand strategies to make their systems more open to each other. A coincidence? I think not. It's interesting to me that Oracle quit making headlines about its JEDI lawsuit after August.

More interesting is that as much as Trump wanted to "screw" Amazon, he didn't seem to offer help to his friend Safra Catz who is now CEO of Oracle.

The Cloud Computing Utility

I've written frequently that the IT industry is commoditizing and that a utility is forming. An IT or cloud computing utility might look similar to the electricity industry -- in which many vendors adhere to accepted standards and present the appearance of a continental grid (it's not a single grid but that's a story for another time).

If all of that is true, then Microsoft sits in position to become the standard setter and gatekeeper. There would be a lot of contention over databases, but perhaps the Oracle product might be used in large, ultra-secure situations.

Maybe Oracle and Microsoft also would agree on the central importance of Exadata as the hardware foundation too. There are lots of permutations, but most importantly JEDI might force a truce and foster better interactivity standards, some of which are clearly under way.

In that kind of environment there also might be room for IBM's Watson and Amazon's datacenters, as well as other advanced technology.

My Two Bits

I can't fathom how the award could be the end of the story. In a lot of procurements, the government puts itself in the position of choosing the best and most viable vendor and of telling all the others the equivalent of "your baby is ugly." That's not the case here.

America brims with technology talent and products (a consequence of the government-sponsored space race, ultimately), so each contender could have done a credible job of at least being the prime contractor.

The big impact of the deal will be how it shapes cooperation among the oligarchy that now controls much of our technology future.

The CIA bought relational database technology from a startup named Oracle in the 1980s, and a relatively young Larry Ellison became its chief support person -- at least for a time. Relational databases were much better at managing data and reporting than the flat file systems then in use. Even Oracle's company name suggests being able to predict the future in the way that the ancient Greek Oracle at Delphi did.

That win spawned the RDBMS revolution. We all became SQL fluent, and Oracle never looked back.

The JEDI contract feels like one of those moments when a government procurement can change an industry. That's why it was so closely contested, and why I think we'll now see the industry coming together and creating new interoperability standards.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.


Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. Email Denis.


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