The news: The Pentagon canceled Microsoft’s $10 billion Joint Enterprise Defense Infrastructure (JEDI) plan two years after awarding the hotly contested contract, per The Wall Street Journal. The reset means that the door is wide open for Microsoft, Amazon, and other players to continue their bid as the Department of Defense (DoD) is now skewing toward a multivendor approach over its previous single-vendor requirement.

In response, Microsoft said in its blog: “We understand the DoD’s rationale, and we support them and every military member who needs the mission-critical 21st century technology JEDI would have provided. The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward.” Microsoft recently won a $21.9 billion contract to develop military AR headsets.

How we got here: JEDI is a Trump-era cloud computing defense contract initially worth up to $10 billion over a decade. Microsoft and Amazon were the last two vendors standing in a long and protracted bidding war which, in the end, leaned in Microsoft’s favor. Former president Donald Trump expressed concerns over Amazon’s JEDI involvement. The process for developing and awarding the JEDI contract has been fraught with conflict-of-interest allegations, litigation from Amazon, and worries that a single vendor for such a large and important contract might be counterproductive.

The DoD listed its requirements for a similar multivendor project:

• The Pentagon said in a press release that while its requirements changed, it still needs enterprise-scale cloud capability and announced its new multivendor contract will be known as the Joint Warfighter Cloud Capability.
• JWCC will be a multicloud/multivendor Indefinite Delivery-Indefinite Quantity (IDIQ) contract. It will be awarded in spring 2022 and will run no more than five years.
• Officials expect that Google, Oracle, and IBM could be included in the mix of vendors. A monetary value for the contract has not yet been determined.

Why this could succeed: While harder to manage from the Pentagon’s standpoint, a defense contract with multiple cloud stakeholders removes any shadow of preferential treatment or bias against vendors. It also distributes research and development more equally across various companies. Each of whom can focus on their specific areas of expertise. Finally, a multiple-vendor approach speaks to a joint effort from leading cloud technology providers, which sends a strong and necessary message of unity and cooperation against would-be hackers or bad actors.