Microsoft, intelligence agencies sign cloud deal

Agreement builds on one between Office of the Director of National Intelligence and Dell

Microsoft Corp said it’s secured a lucrative cloud deal with the intelligence community that marks a rapid expansion by the software giant into a market led by Amazon.com Inc.

The deal, which the company said yesterday is worth hundreds of millions of dollars, allows 17 intelligence agencies and offices to use Microsoft’s Azure Government, a cloud service tailored for federal and local governments, in addition to other products Microsoft already offers, such as its Windows 10 operating system and word processing programs.

The cloud agreement gives Microsoft more power to make its case to the Pentagon as it goes up against competitors like International Business Machines Corp, Oracle Corp and Amazon for the agency’s winner-take-all cloud computing contract for up to 10 years. Amazon Web Services, the leading cloud provider, is widely perceived to be the front-runner for the job, which is expected to amount to billions of dollars over the duration of the contract.

“What this does, is it reinforces the fact that we are a solid cloud platform that the federal government can put their trust in,” Dana Barnes, the vice president of the company’s national security group, said in an interview. “If the IC can trust it, so can the DOD.”

A Pentagon spokeswoman didn’t comment on the Microsoft cloud agreement.

Microsoft’s new deal renews and expands a previous agreement between the Office of the Director of National Intelligence and Dell Inc, which licences Microsoft’s products to the federal government. The Office of the Director of National Intelligence manages the efforts of the Central Intelligence Agency, the National Security Agency and parts of other agencies, including the Defence Department. Under the deal, each agency can choose whether and when to adopt Microsoft’s cloud, Barnes said.

As part of a separate deal, the Defence Department has said it intends to move the department’s technology needs — 3.4 million users and 4 million devices — to the cloud to give it a tactical edge on the battlefield and strengthen its use of emerging technologies. Tech companies jockeying for the contract, including Microsoft, have urged the agency to pick more than one vendor for the project, arguing that awarding only one contract will stifle innovation and increase security risks.

Microsoft’s entry into the intelligence community follows Amazon’s 2013 contract with the Central Intelligence Agency. That $600 million (Dh2.2 billion) deal has elicited praise from Defence Secretary James Mattis. “We’ve examined what CIA achieved in terms of availability of data” and “also security of their data, and it’s very impressive,” Mattis said at congressional hearing in April.

In April, President Donald Trump fired off several tweets that were sharply critical of Amazon on topics that included the Postal Service, taxes and retailing.

As part of a separate deal, the Defence Department has said it intends to move the department’s technology needs to the cloud.