(Bloomberg) Alphabet Inc.’s Google has decided not to compete for the Pentagon’s cloud-computing contract valued at as much as $10 billion, saying the project may conflict with its corporate values. IBM Corp., meanwhile, has filed a protest against the Defense Department’s planned “winner-take-all” contract, contending it restricts the field of competition.
Like other companies competing in the cloud-computing business, Google and IBM assert the pending contract favors Amazon.com Inc. and its Amazon Web Services cloud technology business. Others wary of the contract favoring Amazon include Microsoft Corp.l and Oracle Corp.
The project, known as the Joint Enterprise Defense Infrastructure cloud, or JEDI, involves transitioning massive amounts of Defense Department data to a commercially operated cloud system. Companies are due to submit bids for the contract, which could last as long as 10 years, on October 12th.
Google’s announcement on Oct. 8 came just months after the company decided not to renew its contract with a Pentagon artificial intelligence program, after extensive protests from employees of the internet giant about working with the military. The company then released a set of principles designed to evaluate what kind of artificial intelligence projects it would pursue.
“We are not bidding on the JEDI contract because first, we couldn’t be assured that it would align with our AI Principles,” a Google spokesman said in a statement. “And second, we determined that there were portions of the contract that were out of scope with our current government certifications.”
The spokesman added that Google is “working to support the U.S. government with our cloud in many ways.”
Google is behind other technology companies such as Amazon.com Inc. and Microsoft Corp. in obtaining government cloud-security authorizations that depend on the sensitivity of data a service is hosting.
The JEDI contract attracted widespread interest from technology companies struggling to catch up with Amazon in the burgeoning federal government market for cloud services. Final requirements for the project were released in July after a months-long lobbying campaign in Washington by tech companies.
“Had the JEDI contract been open to multiple vendors, we would have submitted a compelling solution for portions of it,” the Google spokesman said. “Google Cloud believes that a multi-cloud approach is in the best interest of government agencies, because it allows them to choose the right cloud for the right workload.”
“Throughout the year-long JEDI saga, countless concerns have been raised that this solicitation is aimed at a specific vendor,” Sam Gordy, general manager of IBM U.S. Federal wrote in a statement to be posted on a company blog last week. “At no point have steps been taken to alleviate those concerns.”
In a report to Congress, the Defense Department said making multiple awards under current acquisition law would be a slow process that “could prevent DoD from rapidly delivering new capabilities and improved effectiveness to the warfighter that enterprise-level cloud computing can enable.”
The department also said it expects “to maintain contracts with numerous cloud providers to access specialized capabilities not available under the JEDI Cloud contract.”
Amazon, meanwhile, is moving ahead on another cloud front. Amazon Web Services, or AWS, signed new deals with customers SAP SE and Symantec Corp. worth a combined $1 billion, according to an internal memo, underscoring the company’s growing momentum in the market for internet-based computing power and storage.
The contracts are each worth $500 million over five years, the text of an Amazon email from September showed. Both transactions represented expansions of existing partnerships. Microsoft Corp., the No. 2 cloud-services provider, had also competed for the Symantec deal, according to the memo.
Some of the world’s largest technology companies have been duking it out for supremacy in the cloud. AWS, Microsoft and Alphabet Inc.’s Google have all tried to woo organizations and companies by touting the capabilities and performance of their services, which help organizations store and process data remotely, build new applications and adopt new technologies including artificial intelligence. AWS has so far maintained the lead, winning $17.5 billion in sales last year. That’s out of a market estimated to have been worth $30 billion in 2017, and expected to balloon to $83.5 billion by 2021, according to research firm Gartner Inc.
AWS declined to comment.
“SAP announced its multi-cloud strategy more than two years ago,” a spokesman for the Walldorf, Germany-based software company said in a statement, referring to SAP’s plan to maintain a presence on the world’s largest public clouds, such as AWS, Microsoft, Google, IBM and Alibaba Group Holding Ltd.’s cloud. “We believe in the power of collaboration.” SAP declined to comment on the Amazon agreement outlined in the memo.
“We do not disclose details of the agreements underlying our relationships,” Sheila Jordan, Symantec’s chief information officer, said in a statement. “As our cloud business has evolved, we have continuously evaluated our business relationships with our cloud partners.” Symantec is committed to a multi-partner cloud strategy and works with partners including AWS, Azure, Oracle and other global and regional suppliers, she added.
The annual haul from the two deals—$200 million per year—is a little less than 1% of annualized revenue for AWS. The unit notched sales of $11.5 billion for the six months that ended June 30, according to a regulatory filing. Amazon shares were little changed in early trading Wednesday and are up 60 percent this year. SAP slipped 2.1% bringing gains this year to 8.9%. Symantec, which is down 29% this year, was also little changed.
AWS has been focusing on maintaining its sales leadership in the face of growing traction from its rivals. While SAP has spent more money with Microsoft and Google over the past 12 months, “our SAP internal share of wallet stays pretty stable at 70%,” according to the text of the AWS memo. The new deal is for the base layer of computing and storage services, as well as other tools for data management, AI and the internet of things.
The Symantec deal represented an increase of more than seven times in the cybersecurity company’s spending on AWS, meaning that it “has been able to capture more than 80%” of Symantec’s cloud spending, according to the document. Symantec will migrate its Managed Security Service, Network Protection and Website Security Service products to AWS in the next 18 to 24 months, the memo showed.
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