- Microsoft opened at a record high on Monday after securing a $US10 billion contract with the Pentagon for its cloud computing services.
- The tech giant was trading 3% higher when markets opening in New York.
- The contract, however, is likely to come at a high legal and technical cost for Microsoft, and could yet face competition from Amazon.
- View Business Insider’s homepage for more stories.
Microsoft’s share price opened at a record high on Monday after it secured a cloud-computing contract with the Pentagon worth $US10 billion on Saturday.
The tech giant pushed up 3% in opening trading on Monday in New York, giving the company a record opening.
According to people familiar with the matter, Microsoft could yet still face competition from Amazon, and its cloud computing services which also hosts Netflix, citing “President Donald Trump’s interference in the bidding process.”
Bloomberg also highlighted Amazon, due to its superior size, and a previous contract with the CIA was considered the frontrunner for the contract.
However, Microsoft has had objections from workers, as a group of employees wrote on Twitter that “We are disheartened that Microsoft accepted the JEDI contract,” adding “as Microsoft workers, we are now complicit of ‘increasing the lethality’ of the U.S. Department of Defence.”
Microsoft said in a statement on Saturday that it would be pursuing defence contracts with the United States despite complaints from employees.
The actual contract is being handed to Microsoft’s smaller business Azure, who has in the last year secured deals from Kroger Co and AT&T, but this deal marks a significant step up for the subsidiary.
On the Amazon snub, Trump also allegedly has a long-running feud with Jeff Bezos, who owns the Washington Post, who Trump says unfairly criticises him. Bloomberg added that a new book by Guy Snodgrass, speechwriter to former Defence Secretary Jim Mattis, reportedly says that Trump told Mattis to “screw Amazon.”
Bloomberg said it is believed that Amazon was the frontrunner till Friday evening.
“For over 40 years, Microsoft has delivered innovative, proven and secure technologies to the US Department of Defence (DoD),” Toni Townes-Whitley, President, US regulated industries, at Microsoft said to Business Insider. “We are proud that we are an integral partner in DoD’s overall mission cloud strategy,” Townes-Whitley added.
Amazon, and the White House did not immediately respond to requests for comment.
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