Most Powerful Women Summit 2019: Behind Amazon's $10 Billion Pentagon Bid
Amazon’s $10 billion bid to build out the Pentagon’s new cloud computing infrastructure is huge—and in limbo.
glad you're with me. I would be much more boring on my own. So, Teresa, thank you for being here with us. Um, we're happy you had a short commute home for you. Love it. Love Washington, D. C. It's a boring town. So for those of us who aren't fully steeped in government procurement processes and the D o d Jed I project, what is the Jet I project? Can you just explain? Well, first of all, thanks for having me. And it's amazing to be here with all these other women, and I'm totally shocked that everyone doesn't understand government procurement. But that Jen Ai is a $10 billion contract that the Department of Defense has set out its called a war fatter contract. And it's the first time they've gone out for an enterprise wide capability for a new technology that really supports the war. Fatter at the edge for mission. It's very different. A lot of these they're kind of back office in their large I t contract that this is really considered a war fatter contract. It's a significant, and it's a new kind of model. They're looking to drive 10 year, $10 billion contract, given example of what is the warfighter cloud or contact me and what kind of applications? Yeah, well, one of the reasons is different. If you think about Ah, war fatter, they need information in real time and then kind of old mall. Today they've had thio B. It takes him a long time to get information that they need because they would have to buy tools and wait for them to get him. And when you're in the field and you're in dangerous ferries, there's areas around the world you can have as an example. You need information dissemination. You need the ability to rapidly pull in and process data and analyze it and get it to the war fighters so they could do something with it. And today, because of the amount of data and how much comes down, is being processed. If you think about N men vehicles over header drones that are looking at things, there's a lot of information flow coming from that, and if they can't process and decide what to do with that information quickly, the other area is continuous communications or resiliency of communications. So it's satellite many times in the field for war fighters. They're sad, like jam or communications networks get a cat, then cloud computing allows them to have that continues level of communication in 1/3 area. Me Hall would be like training and maintenance, where they have continuous information about fleet so they know what's working, what's not. And then just virtual in real time training. And it's it's critical for them to have these capabilities at all time. This all sounds like something that we would think already existed but doesn't a d o d Why why is that? Well, d o d for some of you may not know the U. S. Department since then, more many on I t than anyone in the world by far. And you have again. Like I said, I see capabilities, and then you have mission and mission trumps everything in government, as it should just in business that the old model of I t. Is one where you go out and you, Babin just servers and you back things that you don't always need and kind of hope you have what you need. Cloud computing is still fairly new. It's not need to start up. That's the company's you've heard here they begin. They begin their companies and building sustained. They don't know their cloud native. We call, they just build their tools in clouds. Well, governments around the world, Ms Devane have old, very outdated legacy citizens on part of it is because of what you just said. The procurement processes are long, laborious, and they get they get processed it all the time. It takes a very long time. And in the past, governments have tended to do these really long contract without continuous innovation built in. Now they're trying to make this shit the old legacy for a very long period of time. Now they're really going through a modernized approach to how they're actually procuring and using technology which mess be done in the United States of America. It's got to be done. So speaking of the laborious process, this one has been particularly complicated with plenty of awesome twists and turns. Talk a little bit about who were the players early on, and what has it been whittled down to, and what's the current status? Okay, so, um, the d o. D. Today it's kind of been reported that they have about 500 cloud projects in the works. But like I said, this is the first big war fighter won over a long period. So there were four bidders originally, which was a TBS, Microsoft, IBM and Oracle that we know. It's like, you know, us being an unwed survived, and it's down to two. Now it's down. They kind of down selected to which is Microsoft and and we're waiting. And Oracle was happy with that. Totally, completely. You can see that. No, they were not happy. They went. They protested it, which is not unusual, by the way. For again. I know you ladies. I'm excited that you want to know about government contracting. I'm sure it's riveting topic that it does. It does effect all of them on a daily basis as matches. It's kind of, ah, hard to dive into. We should all actually be really concerned about this. But it is kind of a status quote in government that everything gets protested, which is kind of bad, because it delays innovation and one of the things me haul it. We've Janet dated. Yes, I came to Amazon and 2010 and started our public sector business, Brandy and Jeff. And the reason what we said. Government and citizen citizens deserve the same top of technologies. And he started up, and our role has been to provide the governments around the world, the U. S and others with technologies that help them move faster and have the innovative capabilities that built in better, faster, less expensive with security by design. So, uh, it is definitely true that these kind of contracts that contested all the time on but that's the status quo. But is it unprecedented? The level to which this particular contract has become politicized? Well, um, I have been doing I've been working in public sector for liver 20 years now, and I have seen a lot of these. Sometimes they're not as always out there in the press, but there are a lot that kind of will get political for tankers, aircraft care. I mean, there's been a lot of things because this is big business. Like I just said, D o d been Maur many than anyone else in the world on information technology, and when you're trying to go into shift, a lot of people don't want change, and a lot of the vendors that are in there. They don't want change because change means that somebody's me, their cheese and they potentially won't have the same type of business as they had before. But that's innovation. That's what we all do is compete every day. So it is. It has been out there a lot. I will have to admit. Even for May. I was shocked. I was like, Oh, wow, this contract that when you consider it's such a massive ship, that's the reason because you're going from on premises lost the dollar spent a lot of these vendors to move to the cloud for a lot of mission capability, which we need so and just to give a little bit more context. One of the allegations, I guess the concerns that have been brought up on the part of your rival bidders, at least earlier on in the process, was that the profits was rigged in favor of Amazon and things have been brought up like you meeting with Mattis and all sorts of other things. And there's like this crazy chart that was drawn with parts and whatever annexing Amazon executives with governments and beauty and and so, um I mean, I'm guessing I know what your answer is, but I mean, was there any wrongdoing? Was the process ribs? No. The process was not rig there, Yanni, or I'm sure, because if you said you were gonna break news here Yeah, I wish I wish I had a crystal ball. Actually, I wish I, you know, had a wall. But this was one of the most complicated I've been doing for Germans for years. Mike. Team, I think we did, uh, 15,000 different procurement on my team just last year that we did for this is the most complex when I've ever seen in my career. I mean, I really mean that. I think the reason that, uh, some legacy providers were worried that in 2030 seen a TV s won the intelligence community cloud and people were shocked. I mean, it was I've heard people say it's kind of shot around the world. They're like, What? How did they win that? That the intelligence community had already been looking for cloud computing capabilities. And when we win that and we built it, we have sustained that. The intelligence community is doing amazing things with their innovation. So we built clouds that every classifications level from and last two top secret to secret. And we we have experience. We have that experience and I think that is the reason people thought was working in their local Amazon. Just gonna win this because it's working. How many of you, by the way, knew that Amazon runs the CIA's cloud, Raise your hand show of hands. Okay, well, you know, you have to be on the case and every star that doesn't surprise me. So another another concern that has been raised is that is the fact that the O. D. Is going with a single vendor. Why not multi vendor? Wouldn't that actually helped bubble up more innovation and increase security? Well, if you go back 2013 why did the intelligence community to make the decision for to do a single cloud? It was because they don't have the capabilities they need of training and education yet. And you know, we can't underestimate. Moving to the cloud is complicated when you're moving Oh, legacy systems. And when you're asking an end trained force, the people to get trained on multiple clouds with multiple security configurations that makes the war fighters job more complicated, not easier. So I think they I personally think they're making the right decision because they need one enterprise wide model for this toe. Actually, over time they can actually, And by the way, they'll have multiple companies and partners on top of whatever cloud they choose. That one, not one group. And if you look at D o. D. Today, they're not a single cloud. They have. Like I said, 500 cloud project. They have other clubs, but these are different clouds for the warfighter cloud. This your father? This is one that they can try to make out. That d o d will only have this one, which is not the case. They already have project my team. We work on multiple projects today, a deity. But for this one, it is the right thing because they need a single enterprise solution that they can build on and learn and scale and that the way they should get started. I still believe that is the right thing for them. Whatever vendor they choose. Whatever partner, they cheese. I think it's the right thing for that. And let me ask you real quick also, because we can't have this conversation without talking about President Trump. This has become politicized. President retreated a story calling this contract in the bidding process the basil bailout. He repeatedly refers to the Washington Post, the Amazon Washington Post and everybody knows that there's a beef there. How has that complicated this process from your perspective? Well, um, like I shared. I've been doing this for 20 years and my team and myself running the public sector. We always look at the long term, not the short term. And we want to build solutions that outlast all of that and that we give and we put technologies in the hands truly of our citizens were factors in the public servant that are required. And we kind of I have to get beyond all this. I know that sounds maybe strangely, Hall, But you can't dwell on this death, and I will I will have to say a lot of people may not know this, but this administration has actually driven a lot in the item modernization area. So for cloud, as an example, we've seen customers across government adopt cloud at a much faster rate during this administration than ever before. Up in the Obama administration. A good friend amount of that Kendra started. He was the first thing out of the federal government, and he started this process that really this administration has taken They have a very effective i t. Modernization policy. And we are seeing a broad adoption there. So we really I know what you're saying. If you don't mind the president calling it, I think people in from her just say if you are a public company, you have to be screwing up. It's OK. And you have to take that feedback and learn from it and do the best you can. And like I said, we just we have to build things that are outlasting us. And we can't just focus on the kind of political well, things that happen all the time. Okay, well, I wanted to get you a lot more, but I'm so sorry we have to wrap up. Thank you so much for being here with you.