In March, the Department of Defense set in motion a high-stakes, winner-take-all battle for its cloud contract. Reports suggest that the agreement could last a decade and be worth close to $10 billion dollars. Here’s the thing though, the cloud companies think this single vendor approach is a bad idea, but the DoD says it won’t budge.
The second round of the bidding began this week with the release of the updated RFP, which has been dubbed with the very cool Star Wars-themed name, JEDI. The DoD reiterated its position that this would be a winner-take-all bid, and they had no intention of going with a multi-vendor strategy.
Vendors who obviously would benefit from being chosen have suggested that this is an ill-conceived approach, that the DoD would better served with a multi-cloud plan. That’s because each cloud vendor pushes the other. The innovation doesn’t happen all in one place and the industry is constantly shifting and changing.
What’s more, it would allow them to pick and choose the best vendor for their requirements across the cloud stack. For instance, it could choose Google for an office suite and email, AWS for infrastructure, and Microsoft for private cloud implementations.
The DoD isn’t budging though. While it sees the advantages of a multi-vendor approach, it desires a single integrated solution even more. It thinks that it will provide the smoothest, easiest management and of course there will always be one throat to choke should anything go wrong.
Most large enterprises today prefer to go with multiple vendors, and make no mistake the DoD is a large enterprise. They favor flexibility over vendor-lock-in. They want tools that let them shift as the technology changes.
This is in stark contrast to the 1990s and early 2000s in the pre-cloud days when it was all about a single vendor. Companies like IBM, Oracle, EMC, and Microsoft wanted you to buy their entire stack and IT pros were happy to oblige. Back in those days, you would be an IBM shop or a Microsoft shop and that was fine.
The interoperability of the cloud makes that approach obsolete. While the cloud companies want to win just as much as any other time in history, especially with $10 billion on the line, they also recognize their customers demand a high level of cooperation and interoperability and they are providing that.
If they aren’t forced to do business with a couple of large vendors anymore, it doesn’t make a lot of sense for the DoD to take this approach, but for now the department says 50 companies are vying for the contract, and ultimately they will choose just one.
In reality, there are only a handful of companies that could deal with a contract this large, and they are the usual suspects — Amazon, Microsoft, Google, IBM, and perhaps Oracle.
While it’s conceivable that a consortium of companies could come together to win the bid collectively, that would seem to go against the spirit of the process, and the clear desire by the DoD to have a single vendor be the winner. Whatever happens, this is certainly going to be interesting to watch, and see if the DoD sticks to its guns and keeps the single vendor approach or allows a group of companies to work together.