Microsoft a shoe-in for $8 billion military contract says analyst

While Microsoft is still combatting Amazon for the $10 billion Pentagon JEDI contract, analysts say the company has absolutely no competition when it comes to a similar $8 billion contract to provide email, calendar and other collaboration tools to the Pentagon.

The intent is for DEOS to replace all the disparate, duplicative collaboration tools Defense Department agencies use around the world. Components, including the Army, Navy and Air Force, “will be required” to use the same cloud-based business tools.

The so-called Defense Enterprise Office Solutions would see Microsoft as the solution provider for a number of other 3rd party companies who will actually be servicing the contract, meaning while there is set to be many bidders, the main beneficiary will always be Microsoft.

“It’s Microsoft or nothing,” said Daniel Goure, senior vice president at the Lexington Institute, an Arlington, Virginia-based nonprofit public policy research. “It’ll be on the fringes of the bids where the decisions are made as to what team actually wins DEOS. Microsoft will simply offer the same stuff at the same price to everyone.”

Microsoft’s closest competitor is Google with its G-Suite, but that company has only managed to corner a minuscule part of the government market, and lack the sophisticated certifications Microsoft has already collected and are on the way to acquiring.

“Even if Google were trying to get involved in DEOS, it is not readily obvious they could even meet the certifications in time,” Bloomberg Government analyst Chris Cornillie, said. “Microsoft is not the only player in town, but they are the only player in town capable of meeting [Impact Levels] 5 and 6 and delivering what the Defense Department says it wants.”

In a statement, Microsoft said, “We believe our 40-plus year partnership with the Defense Department, in concert with our efforts to modernize productivity and collaboration with Microsoft Teams and Microsoft 365, provides innovative, proven and secure technology to support the DoD’s mission.”

It is not clear if winning DEOS will help or hinder Microsoft from winning JEDI, since the Pentagon may be reluctant to put all their eggs in Microsoft’s basket. If they do however it would instantly transform Microsoft into the largest cloud vendor for the federal market.

Read much more detail at Nextgov.com here.