Amazon, Oracle, Microsoft jockey for Pentagon’s cloud business

Washington/New York: In late February, Oracle Corp. co-CEO Safra Catz met with a top Pentagon official to discuss the government’s defence strategy days before the department was set to outline how it plans to spend billions of dollars on cloud-computing services. Catz’s meeting with deputy secretary of defence Patrick Shanahan, which was confirmed by a department spokesman, came as technology companies are raising concerns that the Pentagon is leaning toward choosing Amazon.com Inc.’s cloud division as a single provider for a multi-year contract to modernize its technology infrastructure. Having already won two other government cloud contacts, Amazon Web Services is widely perceived as the front-runner for the defence department’s cloud award, while companies including Oracle, Microsoft Corp., and International Business Machines Corp. fight for a piece of that business. The president of the Coalition for Government Procurement, which represents defence contractors including Oracle, IBM and Microsoft, wrote in a November letter that “a single award DOD Enterprise Cloud Acquisition contract would lock-in DOD to a single cloud approach, and, by so doing, give rise to performance and national security risks.” Sam Gordy, the head of federal business for IBM, said he would prefer for the DOD to award multiple-cloud contracts competitively. Seattle-based Amazon leads the cloud infrastructure market with 44.2%, followed by Microsoft’s Azure with 7.1%, China’s Alibaba Group Holding Ltd. with 3% and Google Cloud Platform at 2.3%, based on total cloud industry 2016 revenue, according to research firm Gartner Inc. Amazon already has a cloud contract with the US Central Intelligence Agency dating back to 2013 that’s worth $600 million.