Silicon Valley’s dissatisfaction with the Department of Defense (DoD) is well-documented and well-founded. Too often, the department grants initial support to create a promising technology, only to fail to provide the funding to sustain a scaled capability.
This financing imbalance is so well-known that it has a nickname—the so-called “valley of death”—and it makes the Pentagon an untrustworthy partner.
When defense and technology officials recently convened in California for the annual Reagan National Defense Forum, investors and technologists made it clear that their collective tolerance for the Pentagon’s inability to work effectively with the defense innovation base is approaching the point of no return.
While the criticism about the DoD looks to be a driving reason for American tech companies to generally abandon the law enforcement agency, Microsoft has taken an entirely different approach. Microsoft has utilized its standard abilities to build a military throne.
The giant has contracts with government organizations, notably the DoD, to offer military-grade software and other technical services.
When you consider their intimate relationship with the Pentagon, a question arises:
“How does the business renowned for spreadsheets and Word Documents do it?”
In fact, from the way this company compete in the market, we can come to an assumption that this powerhouse is “craving for war.” Let’s see if this assumption stays true!
The Quest of Dominance of a White Collar
Today, Bill Gates is regarded as one of the globe’s most generous philanthropists, and his contributions have had a substantial impact on many of the world’s most important social and economic issues.
Few people, however, have noticed how he has constructed his empire – Microsoft like a drill sergeant. To prove this point, let’s go all the way back to the 1970s when computers were only used in labs or offices or in offices that made sense.
They were massively expensive equipment designed to accelerate very particular tasks performed by the corporations that dominated the industry at the time. Nobody thought the typical person would ever want their own computer, but Bill Gates held another point of view.
He said, “well I think we will get one in every office and in every home.”
Developing your own computer kits was increasing in popularity. Indie hackers were beginning to set up computers at home as technology became more affordable. Clearly, there was going to be a great avalanche of technological advancement, and the snowball that initiated this Avalanche was the Altair 8800, one of the first personal computers.
Bill Gates and his high school buddy Paul Allen began developing software for the Altair, with their first release being a version of the basic programming language that allowed Altair users to design and run their own simple programs.
Bill was preoccupied with details; he led Microsoft like a wartime general; for Bill, business was a battle, and competitors had to be destroyed. He was up against an overwhelming behemoth – IBM.
At this point, IBM had a decades-old bureaucracy. After Altair’s popularity, IBM realized they needed a personal computer strategy, and Bill Gates was the greatest candidate at the moment. The two companies forged an alliance, and Bill Gates agreed to supply IBM with an operating system called MS-DOS.
IBM preferred to pay a fixed price for the software license, but this would have limited Microsoft’s upside. That’s why he returned to demand a royalty deal. This provided him with a guaranteed cash stream and ideally positioned Microsoft to dominate the fast-rising PC software market by 1991. MS-DOS brought in more than $200 million per year for Microsoft.
But that was only the beginning of his drive for domination. The PC expansion surge of the 1980s and 1990s meant that software became a critical component of how major companies worked, eventually prompting one of the largest of them all, the United States military, to contact Bill Gates.
The Navy debated which operating system should run their warships in the mid-1990s. Their ultimate goal was to construct a smart ship system that used off-the-shelf PCS to automate operations that sailors had historically performed manually.
If it worked, the Navy might cut crew workload, increase combat readiness, and ultimately provide a safer operating environment. Unix-based systems like Linux were open source, robust, and adaptable, but everyone in the Navy already used Windows at home.
Recognizing his opportunity, Bill Gates pitched the Navy on Windows for Warships, a customized version of Windows NT 4.0 that would be the standard operating system on Navy boats.
Windows for Warships remain with mankind nowadays and not only for the United States. The British Royal Navy still adopts a variant of Windows for Warships to offer strategic information and bomb controls across all of its active submarines.
That is where Microsoft and the Department of Defense first met. Since the beginning, the cohabitation has sparked flames. However, it wasn’t until the 2019 controversy that people began to learn more about this relationship.
The Most Controversial Contract of All Time
At the time, most big corporations had already shifted some of their computing operations to the cloud base, and the US military intended to follow suit.
As the armed forces deployed a huge number of remote sensors, semiautonomous weaponry, and artificial intelligence applications, unifying information in the cloud became more important than ever.
All of these capabilities necessitated fast and instantaneous access to massive amounts of data gathered from a variety of sources.
That was why the United States Department of Defense planned to update its IT infrastructure so that front-line employees, officers, and soldiers could access and alter data at the pace of modern corporations.
In July 2018, JEDI – “Joint Enterprise Defense Infrastructure” – was born as a result of the execution.
The JEDI initiative proposes for a ten-year, $10 billion federal contract to be awarded to a single cloud computing vendor, who will operate as the US Department of Defense’s sole cloud computing provider.
The contract triggered a bidding war between Amazon, Microsoft, Oracle, IBM, and Google for the mission of transforming the military’s cloud computing platforms.
Google backed out without submitting a formal offer in October 2018, arguing that the military work violated corporate ethics forbidding the use of artificial intelligence in armament.
According to Oracle, IBM, and Microsoft, the DoD should not choose a single cloud vendor for JEDI. Some specialists agreed with them. According to Justin Cappos, associate professor of computer science and engineering at New York University, a single cloud solution was unusual.
Because it is safer, many businesses use various cloud vendors. Microsoft’s general manager for national security, Leigh Madden, indicated that his company wanted the contract, but that 80 percent of businesses utilized various cloud vendors.
Other experts have pointed out that deploying a single cloud contradicts established best practices and commercial market trends. They argue that a contract of this magnitude should not be awarded to a single company.
On the other hand, those in support of a single JEDI vendor point out that doing so would minimize complexity in military IT systems and streamline communications.
Oracle America and IBM also objected to the JEDI Cloud request for proposal (RFP), arguing it favored Amazon and Microsoft. The General Accounting Office (GAO) dismissed these in late 2018.
Although the echo of criticism had rung even before the final decision, in the end, Amazon and Microsoft, which have numerous data centers around the globe, became the two finalists, and Microsoft was awarded the contract in October 2019.
Following the announcement, the Pentagon’s JEDI contract has been dogged by questions that may not reflect well on the Defense Department or the American government.
Amazon quickly contested the JEDI contract award in court, claiming that the bidding process was unfair and that there had been political intervention in the decision to give the contract to Microsoft.
On February 13, 2020, a federal judge ordered the Pentagon to cease work on the JEDI contract, which had been granted to Microsoft.
Because of its dominance in cloud computing (it has 45 percent of the market) and experience providing cloud services for the Central Intelligence Agency, Amazon has long been considered the favorite to win the JEDI contract.
However, its bid was clouded by charges of conflict of interest. Amazon filed a lawsuit in December 2019 to prevent the contract award to Microsoft, claiming that the decision was inappropriately influenced by President Trump’s public criticism of Amazon.
Jeff Bezos, the CEO of Amazon, owns The Washington Post, a frequent critic of Trump and his policies.
The legal battle over the $10 billion JEDI contract lasted several years, with multiple appeals and delays before the DoD terminated the contract in 2021.
The contract has brought nothing but chaos, and the cloud infrastructure stayed the same. With the need for cloud computing remaining, the Defense Department decided to launch a new program.
On Time Shift from a Clown to the Cloud
The DoD announced a replacement program, the Joint Warfighter Cloud Capability (JWCC), that is planned to be “multi-cloud / multi-vendor” in the same announcement that scrapped JEDI.
Though little is known about the JWCC, the Department of Defense has given a few suggestions as to what it will be. First, the DoD claims that JEDI is being phased down because “it no longer meets the requirements to fill the DoD’s capability gaps.”
The initial announcements for the JEDI initiative in 2017 gave some military groups the green light to relocate to the cloud. Several organizations, notably the Air Force’s Cloud One and the Defense Information Systems Agency’s milCloud 2.0, have moved to the cloud on their own.
In addition, the Army has made major efforts to transition to a cloud enterprise. The DoD did not believe it was necessary to move these agencies to another cloud because these clouds were already in existence or in development.
However, security is a major issue, especially in light of recent cyber-attacks on American networks. A single cloud enterprise from a single vendor represents a huge vulnerability risk.
The size of this system would make it difficult to secure, and a single intrusion could result in catastrophic consequences. Having many clouds, on the other hand, allows each cloud to be more easily protected while also containing any security breaches.
According to the DoD release, Microsoft and Amazon will each receive a part of the JWCC contract. Despite their subtle digs at the announcement, both firms appear eager to work on JWCC. Indeed, the DoD has a high need for cloud computing, so there is enough work for both organizations.
More crucially, having two independent organizations working on the cloud architecture will necessitate some level of interoperability so that data can flow between the various networks.
In order to accomplish so, the JWCC will need a high level of interoperability and flexibility, allowing systems from other vendors (such as IBM, Oracle, and Google) to be incorporated.
Because cloud technology is continually changing, new companies are joining the market, and defense requirements are changing, this flexibility will be critical for the DoD in the future.
Many will claim that the JEDI program was canceled for political reasons; whether or not this is true is debatable. The transition from JEDI to JWCC will offer the DoD with a more secure and versatile network. Given the role of computer networks in modern warfare, this change was unavoidable.
That’s all about the JEDI contract conflict and the on-time shift to JWCC. Come to this part, many will wonder if Microsoft is losing on the Military field. The answer varies, we need to look at how the behemoth has been doing in this sector.
Is Microsoft Losing Their Edge in the Military Field?
For many years, Microsoft has maintained a business connection with the US DoD, offering various technology goods and services to assist the department’s operations.
Despite the controversy surrounding the JEDI contract, Microsoft has continued to collaborate with the Department of Defense on a variety of projects and contracts. The corporation has indicated that it is committed to assisting the DoD’s goal while also being open about the ethical concerns that come with working with government entities.
But Microsoft seems to bear the brunt every time it announces an alliance with the Pentagon.
In November 2018, Microsoft wins $480M military contract to outfit soldiers with HoloLens AR tech.
When the official announcement came, Microsoft employees immediately demanded that the business cancel this half-billion U.S. Army contract, claiming that Microsoft had “crossed the line” into weapons development for the first time.
According to them, the contract’s usage of Microsoft’s HoloLens augmented reality technology “is designed to help people kill.”
The workers claim in a letter to Microsoft CEO Satya Nadella and President Brad Smith that the corporation fails to inform its developers “on the intent of the software they are building.”
Despite the growing chaos, the corporation believed that “the individuals who defend our country needed and deserved our help”. Second, withdrawing from this market reduced the tech giant’s ability to join in public discourse about how new technology can be utilized responsibly.
“We are not going to withdraw from the future. In the most positive way possible, we are going to work to help shape it,” said an insider.
This initial $480 million deal was also significant in that it was the nail in the coffin for companies like ODG, which had been banking on winning such a deal.
ODG’s largest customer in the past was the US Government, therefore when that contract was awarded to Microsoft, the company rapidly dissolved. Interestingly, Microsoft was said to have paid $150 million for ODG patents prior to winning both acquisitions.
Coming to 2021, Microsoft announced the closure of a $22 billion deal with the Army for AR headsets, software and services.
This announcement followed a smaller $480 million transaction Microsoft won in 2018, which established the two companies’ partnership and kicked off their collaboration. They collaborated to create the Integrated Visual Augmentation System (IVAS), a semi-custom version of the HoloLens tailored to the Army’s requirements.
While Microsoft has some competitors in the augmented reality area, it is claimed that none of them were even remotely close to being competitive for the deal.
The new agreement, which covers a wide range of hardware, software, services, and cloud infrastructure, is likely to destroy the goals of many would-be competitors for this bid.
Microsoft has agreed to provide the US Army with 120,000 semi-custom versions of the HoloLens, designed for harsh use and outfitted with military-grade sensors and location accuracy.
This contract includes a 5-year duration with an additional 5-year option. If the agreement is extended for ten years, the total cost will be $21.9 billion.
Coming to 2023, Microsoft seems to be more active when the company has been executing several projects with the Pentagon. Microsoft has provided for the DoD the collaboration elements already found in corporations, but in a more secure setting.
The functionality can be added as a line-of-business app by agency administrators. Third-party calling and meeting apps, on the other hand, are not available, at least not for this release, according to Shruti Mundra, Microsoft’s senior product manager for Teams.
Bots are available from Microsoft on the Government Community Cloud, GCC-High – the cloud platform designed for cleared employees and organizations that support the DoD – and DoD cloud environments.
Regardless of the controversy, Microsoft’s contributions to the US army have had a major rippling impact as an innovation catalyst across the US government and into the business sector. Today, there are a few probable variables that may contribute to Silicon Valley’s poor impressions of the Pentagon or the DoD.
It’s also important to note that not all individuals or organizations in the technology industry hold these views, and that there are numerous examples of successful collaborations between Silicon Valley and the Pentagon or the DoD, with Microsoft being just one of them. Perhaps, Microsoft domination in the market has led to all the hatred for a few decades.