Microsoft Corporation (NASDAQ:MSFT) broke the silence after winning a prestigious $10 billion JEDI contract from Pentagon. The deal is valid for ten years. It is a beginning for the company to become a proprietary source for defense contracts. Microsoft is pleased to win this defense contract in fierce competition, outshining Amazon. Its shares rose to $145.5 (up 3.4% premarket) on October 19, 2019, after the news of winning a $10 billion JEDI contract. The shares of Microsoft closed at $144.87 on October 28, 2019. It is surprising to note that specifications in the JEDI contract are framed around Amazon AWS.
Migrates computing infrastructure to the cloud
Microsoft will upgrade the existing computing infrastructure/ data of the Pentagon to the cloud. Pentagon intends to modernize its defense technologically advanced, and JEDI is just part of that initiative. According to brokerage Wedbush, the new contract improves the financial implications of the company in the coming years.
Amazon and other players may challenge the Pentagon’s decision to award the contract to Microsoft. The shift towards Microsoft could be on the backdrop of supplying proven, innovative, and secured technologies to the Department of Defense (DOD) in the US for the past four decades.
Meets the urgent needs of warfighters
Microsoft has put in considerable efforts to fare well in the JEDI procurement process. The company appreciated DOD for choosing it as a technology partner to execute the cloud project. As an integral partner, Microsoft would meet the objectives of DOD to meet the critical and urgent needs of warfighters by deploying secure and innovative commercially available technology.
President (US Regulated industries) of Microsoft, Toni Townes-Whitley, said the company is expecting to strengthen its long term association with DOD. The new contract also supports its employees working overseas and in the US with differentiated and unique cloud capabilities of Azure.
Microsoft supports over 10,000 customers in various government departments that include central cabinet departments and every branch of the military. Its government-specific cloud services are Dynamic 365 Government, Microsoft 365 Government, and Azure Government. The company also established relations with the Department of Interior, USDA Agricultural Research Service, and the Department of Veterans Affairs.