Microsoft emerges victorious in the race to win Pentagon’s $10 billion JEDI cloud contract

At last, the long-lasted competition for the Pentagon’s $10 billion JEDI cloud computing contract has ended with Microsoft taking away the big contract from the hands of the market leader Amazon which was expected to be the most obvious and likely winner. The Pentagon announced Microsoft as the winner in the dramatic competition for public cloud resources for the U.S. Defense Department, on Friday.

Known as Joint Enterprise Defense Infrastructure (JEDI), the contract will provide the Pentagon with cloud services for basic storage and power all the way up to artificial intelligence processing, machine learning, and the ability to process mission-critical workloads.

For Microsoft, this is a huge step forward in the cloud market. Coming out victorious, over a competitor who has held a strong foot in the field, is a big win for the company and the result of which can be seen on the company’s shares which have rose by 3% after the victory announcement by pentagon. If the Joint Enterprise Defense Infrastructure deal, known by the acronym JEDI, ends up being worth $10 billion, it would likely be a bigger deal to Microsoft than it would have been to Amazon.

Early in the bidding process Amazon was seen as the most obvious winner, maybe because of the win in 2013 for the CIA deal by AWS business. Smaller cloud rival companies like IBM and Oracle were kicked out of the process quiet earlier back in April leaving just Microsoft and Amazon as the only companies that could meet the requirements. The contract has been controversial throughout the bidding process, and Oracle lost a legal challenge after it claimed the contract has conflicts of interest.

“We’re surprised about this conclusion,” an AWS spokesperson told CNBC in an email. “AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion. We remain deeply committed to continuing to innovate for the new digital battlefield where security, efficiency, resiliency, and scalability of resources can be the difference between success and failure.”

Microsoft still hasn’t made any public statement over the comment but the company suggests the deal as a “game changer” for Microsoft.