The COVID-19 pandemic caused a significant global economic decline as it increased economic susceptibility across industries. It crushed industries that depended on physical staffing while it left industries that depended on a virtual workforce and the movement of information relatively unscathed. Against the backdrop of an accelerated digitalization of organizations to survive, the cloud computing market continues to experience growth. One area of focus for cloud vendors is government cloud contracts owing to their high value in the millions and sometimes billions of dollars. Two vendors in the race for gov cloud contracts are AWS and Azure. In this post, we look at the significant happenings related to gov cloud contracts in recent months and how they played out between AWS and Azure.
AWS vs. Azure: An outline
Every industry has its market leaders, and when it comes to cloud computing, AWS and Azure are the two heavyweights that are both very good at the service they provide. Their cloud platforms offer the same basic features, from scalability and cost-effectiveness to flexible and superior compute, storage, and security. Additionally, both the cloud providers also offer software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS). But due to the lack of standardization among cloud services, no two cloud platforms provide the exact same service in the exact same way.
Amazon Web Services (AWS)
Amazon Web Services is a constantly evolving, broadly adopted cloud computing platform offered by Amazon. It offers 200 fully-featured services from global datacenters and additional features within these services. With a pay-as-you-go model that is modified based on customers’ usage, AWS proves to be affordable and cost-effective. So, instead of buying large amounts of storage, companies can pay for what they use as costs are scaled accordingly.
The cloud service seems to be a blessing for startups and companies looking to build their businesses from the bottom up. It provides all the necessary tools to start up with or migrate to the cloud by making the process faster and easier.
AWS has multiple datacenters and regions worldwide, so when a disaster strikes in one region, it won’t cause data loss in other regions or globally. These datacenters are strictly monitored and maintained to avoid any intrusions. Additionally, they also have tools that provide software and hardware-based encryption. The top cloud provider provides affordable service to everyone from startups, educational institutions, Fortune 500 companies to government agencies. In a nutshell, AWS is doing for the computing world what Amazon did for the retail world.
Microsoft Azure is the fastest-growing cloud computing service for storage, networking, analyzing, and managing services through Microsoft-managed datacenters. The second-largest of the top three cloud platforms (Google Cloud Platform is No. 3) offers scalable cloud storage and helps maintain hardware and resources that can be accessed on-demand. With a global network of multiple regions and datacenters, Azure services vary by region depending on what resources are required. Most businesses have been using Microsoft solutions for decades, and Azure syncs with this flawlessly, thus encouraging even organizations reluctant to the cloud to make the shift.
Although Azure offers a pay-as-you-go model, if a single application uses multiple Azure services, each service will involve separate pricing tiers. The cloud provider is a disaster recovery and backup dream tool because of its advanced site recovery and up to 99 years of data retention. With a multi-layered security system that helps identify and respond to cloud security threats and manage encryption keys, Microsoft only uses its customers’ data if it’s essential to provide the services requested by them.
The latest showdown: A fight for government cloud contracts
Although AWS has enjoyed an edge over Azure in government cloud contracts over the years, the latter is not far behind. Let’s look at a few government cloud offerings from the past year.
1. The defunct JEDI contract
Although the Pentagon’s Joint Enterprise Defense Infrastructure cloud computing contract was scrapped, the infamous battle between AWS and Azure to acquire it is worth mentioning.
The contract was initially awarded to Microsoft in October 2019. Amazon challenged, claiming that former president Donald Trump had tipped the scales in favor of Microsoft due to his hostility toward then-Amazon CEO Jeff Bezos. After a rigorous legal battle between the two cloud conglomerates, the Department of Defense decided to discard the project as it was outdated and needed evolving requirements. Even before the project was called off, Amazon saw victory. It initially won an injunction halting work on JEDI and ultimately experienced a gain in revenue when the project was canceled.
The $10 billion JEDI cloud project, given to Microsoft’s Azure over Amazon’s AWS (who were seen as favorites mostly because of the deal it had previously won with the CIA in 2013), proved that Microsoft had made strides in catching up with Amazon and cementing its position as a tough competitor in the cloud computing world.
Revamped Pentagon contract: The next JEDI
Although the Pentagon’s JEDI contract fell through, the Department of Defense has decided to pivot to a new enterprise cloud contract that will be shorter-term and multi-vendor. The Pentagon will be splitting the contract between Microsoft, Amazon, and three other U.S. providers and will award two contracts directly to the two cloud computing giants. The new contract, Joint Warfighter Cloud Capability (JWCC), promises to offer enterprise-scale, commercial cloud services.
2. Western Australia’s whole-of-government deal
The Western Australian government awarded Microsoft with a Whole of Government Agreement contract last year. This ensured that all of W.A.’s agencies could access Microsoft’s cloud services regardless of their size. The deal was intended to inject efficiency and enhance cyber security across the public sector. In addition to this, W.A.’s Office of Digital Government had also signed a Memorandum of Understanding (MoU) with Microsoft to identify and eradicate cybercrime and raise the security profile of the State. This came as a pleasant move for Microsoft’s Azure and its revenues.
3. NSA’s WildandStormy
More and more U.S. intelligence agencies have been looking to shift to cloud computing from GovCloud, their current on-premises environment. A few months ago, Amazon and Microsoft were going head-to-head for the NSA’s $10 billion contract “WildandStormy,” which was won by Amazon. Microsoft challenged this win by claiming to the Government Accountability Office (GAO) that the NSA didn’t conduct a thorough evaluation because if they had, Azure, not AWS, would be the obvious pick. The legal battle is still raging on, and it will be interesting to see what the GOA decides at the end of October.
4. The U.S. Army’s re-competing contract
The U.S. Army has begun to look for contractors to manage its cloud environment under a $105.8 million, five-year re-competing contract. The Army Resource Cloud (ARC) contract will support the Deputy Chief of Staff Army G-8’s program budget data management division. The contractors and subcontractors are expected to comply with the level four standards of the Cybersecurity Maturity Model Certification and secure a secret facility clearance from the Defense Security Service. With a contract of such a big magnitude up for grabs, Amazon and Microsoft will surely be eager to grab the opportunity and reign the cloud computing industry.
AWS vs. Azure and the battle for contracts: It’s all about being No. 1
Microsoft has the advantage of legacy footholds across enterprises since Microsoft already provides so many services, especially its Microsoft 365 productivity suite. This could favor Microsoft as AWS lacked enterprise features for a long time. Even so, Microsoft seems to be playing catch-up as Amazon is the No. 1 cloud provider for the federal government due to the relationships and security certification it has been building for decades. But this race is far from over, and it’ll be riveting to see if Microsoft can overtake Amazon to claim the No. 1 position in the cloud marketplace at large and in government clouds as well.
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