Microsoft Just Won a $10 Billion Defense Cloud Contract

The U.S. Department of Defense awarded a 10-year $10 billion cloud computing contract to Microsoft MSFT. The tech giant beat out other cloud titans and industry peers like Amazon AMZN, IBM IBM, and Oracle ORCL to win this coveted DoD contract; getting this deal was seen as a stepping stone for future awards.

Known as JEDI (Joint Enterprise Defense Infrastructure), the contract is meant to update the military’s computing setup, since many computuers currently being used are decades old. Amazon was actually seen as the early frontrunner--its AWS cloud business won a deal with the CIA back in 2013--and overall, the process had been delayed due to drama and controversy.

Wedbush analyst Dan Ives called the deal a “game changer” for Microsoft, explaining in a note to clients that it “will have a ripple effect for the company’s cloud business for years to come.” In its recent Q1 earnings release, Microsoft said that Azure Cloud revenue grew 59% year over year, while commercial cloud revenue grew 36% to $11.6 billion.

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