Oracle and the ongoing JEDI contract fiasco

JEDI? Like the Star Wars film?

Yes, we rolled our eyes too, but the JEDI (Joint Enterprise Defence Infrastructure) contract is no laughing matter. It is a significant $10 billion US government contract for Cloud services that will last for ten years.

JEDI aims to provide “enterprise-level, commercial Cloud services” to the Pentagon and its partners – all US military branches and defence-related intelligence agencies – with appropriate security and operational requirements.

The DoD contract was open to all comers, with hundreds of contractors expressing an interest in JEDI, and over 60 responses to requests for information. However, due to the nature of the contract and the high-security requirements, only four companies (Amazon, Oracle, IBM, and Microsoft) were able to meet the bid requirements and participate. After bidding, however, it became clear that only two companies had a chance of reaching the finishing line: Amazon and Microsoft.

Or so they thought…

Oracle sales strategy 101: Keep pushing

The fight over the contract has been understandably fierce because the stakes are so high. IBM made an initial complaint when it was ruled out of the running, but seems to have quickly made peace with the decision.

Oracle though has taken a slightly more aggressive strategy.

Oracle takes the DoD to court (and loses)

Unhappy with the DoD’s decision to rule it out of the JEDI contract, Oracle went to court, citing that the DoD was:

  • Gaming metrics in the procurement process to restrict competition for the contract – Oracle was ruled out for this reason as its security could not meet the contract’s criteria
  • In breach of its own procurement rules by choosing to only select one company for the contract (we wonder if Oracle would be complaining about this if it was the one selected…)
  • Unfairly biased towards Amazon as a number of individuals involved in the procurement process allegedly had deep ties with Amazon

However, all three of these claims were rejected by the courts, finding that Oracle had been treated fairly given the selection criteria, and that the DoD’s procurement processes were in order. The court said that Oracle “cannot demonstrate prejudice as a result of other possible errors in the procurement process.”

Bizarrely though, in a statement after the court decision, Oracle decided to just shout louder about how its technology surpasses the competition. In a statement to The Register, spokesperson Deborah Hellinger said:

“Oracle’s Cloud infrastructure 2.0 provides significant performance and security capabilities over legacy Cloud providers. We look forward to working with the Department of Defence, the Intelligence Community, and other public sector agencies to deploy modern, secure hyperscale Cloud solutions that meet their needs.”

Oracle Spokesperson, Deborah Hellinger

Strange then, because the Government’s selection criteria have now been deemed valid by the courts, and Oracle has had to publicly concede that it cannot meet these requirements…

Next, Oracle flexes its political muscles

Refusing to take no for an answer, Oracle has also been working behind the scenes to put pressure on the DoD. Various sources have revealed how Oracle has been lobbying to get the procurement contract reviewed at the highest levels.

This started with Oracle Corp. chief executive Safra Catz, criticising the bidding process for JEDI at a private dinner with President Trump, complaining that it seemed designed for Amazon to win.

Several senators then wrote directly to senior DoD officials, demanding an enquiry. US Senator Marco Rubio (who has received millions of dollars in political support from Oracle chairman Larry Ellison) sent a letter asking National Security Adviser John Bolton to delay the JEDI decision, specifically citing that common practice is to contract with multiple Cloud providers, not just one.

This all seems to have culminated in President Trump taking action, ordering new Defence Secretary, Mark Esper to look into whether the process has favoured Amazon.

And now… Oracle goes back to court

But it doesn’t end there. Oracle has decided to appeal the court’s decision that the single-award nature of the contract is illegal.

We can only speculate that Oracle is hoping that this, combined with the political pressure on the DoD, will result in a joint contract with one of the other Cloud providers (like its new Cloud partner Microsoft) that can shore up Oracle’s insufficient security.

What do Amazon and Microsoft think about this?

Microsoft is being quiet, probably because of its recent (and timely) Cloud partnership with Oracle.

And while Amazon is also not responding directly to any of these developments, it was interesting to see how Amazon Web Services CEO Andy Jassy derided other providers of traditional on-premise database services at the company’s tenth annual public sector conference:

“I think that most people are pretty frustrated with the older guard database solutions. They’re expensive, proprietary, high lock-in. They’re constantly auditing you, fining you unless you buy more from them. It’s just a model that people are sick of. And it’s why people are moving as quickly as possible to more open engines.”

Amazon Web Services CEO, Andy Jassy

We agree with AWS, which is why we offer our customers Cloud services on open platforms like AWS and Azure, ensuring that customers are not locked in and have the flexibility to change based on their requirements.

What’s next?

The winner of the JEDI contract was supposed to be announced last month, but with another court case in progress and Mark Esper’s internal review underway, it could be some time before the winner is announced.

We’re not surprised at how Oracle is behaving over JEDI, as we see similar tactics on a daily basis from its sales teams when it comes to support contracts. To see a full run-down of the most common ‘traps’ Oracle uses, download our free guide:


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