Microsoft Scores Big Cloud Deal with Intel Community

Microsoft announced a deal Wednesday with the intelligence community that shows the company is closing the cloud gap with rival Amazon Web Services and could increase its odds of winning the Defense Department’s Joint Enterprise Defense Infrastructure contract.

Under the deal, Microsoft will provide three new services to the 17 agencies of the IC: Windows 10, Office 365 for Government and the company’s cloud offering, Azure Government. The deal is technically a 6-year extension of an existing enterprise agreement that Dell—a Microsoft partner—was awarded five years ago.

Azure Government gives the IC a second commercial cloud services option, in addition to the Amazon Web Services-developed C2S Cloud, which the CIA contracted for in 2013. For the time being, IC agencies can only use Azure Government to host sensitive unclassified information—AWS’ C2S cloud can host classified government data at the secret and top secret levels—but Microsoft told Nextgov the company plans to meet the necessary “Impact Level 6” security requirements to store all the government’s classified data in the coming year.

Microsoft’s timeline to attain IL6 requirements would meet the cloud security demands outlined in the JEDI draft requests for proposals released by the Defense Department. The company would also be able to list the IC as a customer of its cloud services, which could bode well for its JEDI chances given that Defense Secretary Mattis praised the CIA’s C2S cloud in an April hearing with Congress.

“The IC is responsible for handling some of the toughest problems facing the nation, harnessing the intelligence derived from the most sensitive data at unprecedented scale. This new agreement provides the IC with a vehicle for accessing the latest Microsoft technologies to further empower its agencies, optimize operations and modernize infrastructure,” said Toni Townes-Whitley, Microsoft's corporate vice president of industry, in a blog post.

Microsoft is one of the most familiar companies to Defense Department personnel, having served the military for approximately three decades through its various and evolving software platforms. Most notably in 2016, the Pentagon announced a plan to move 4 million devices to Windows 10.

While Microsoft will be one of several companies in the running for JEDI, it is an expected frontrunner for another lucrative Pentagon cloud contract. The Defense Enterprise Office Solution contract could be worth as much as $8 billion and will be bid out in the coming months.