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Jedi Wars Between Amazon And Microsoft Are Still Very Much On

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Jedi Wars Between Amazon And Microsoft Are Still Very Much On

Amazon.com, Inc. (NASDAQ: AMZN) has challenged the U.S. Department of Defense's decision to award a cloud computing contract to Microsoft Corporation (NASDAQ: MSFT). The contract should provide the military with better access to data and technology from remote locations.

It is called the Joint Enterprise Defense Infrastructure Cloud (JEDI), and it is worth up to $10 billion. The arguments made by Amazon were that the contract was awarded because of improper influence by the U.S. President Donald Trump. Of course, the argument did not mention President Trump or any improper influence. It stated that the Pentagon evaluated Microsoft's data storage offer in only one price scenario. And the U.S. judge said that Amazon is likely to succeed with its argument.

How Did It Start?

Amazon was seen as the favorite to get this contract, but it was awarded to Microsoft instead. Just weeks after that, Amazon filed a lawsuit. This lawsuit brought back the animosity between President Trump and Amazon's CEO Jeff Bezos.

On February 13th, U.S. Court of Federal Claims issued a halt order on the stated contract between the U.S. Department of Defense and Microsoft, all based on Amazon's claims that Microsoft's scenario was not "technically feasible" as the Pentagon had evaluated.

How Will This Affect Microsoft?

Microsoft, as well as the Pentagon, were disappointed with the ruling from February 13th, to stop with contract implementation. But Microsoft was still doing quite well. The Zacks Consensus Estimate for full-year earnings was increased, meaning that analysts believe in the company and that the outlook is improving. So far this year, the Computer and Technology group has lost about 4% on average, while Microsoft managed to return 2.45%. So, Microsoft is performing better than its sector. This is why Microsoft has a Zacks Rank of #1 (Strong Buy), and the company is expected to continue with its solid performance.

Coronavirus Is Making Tech Employees Change Their Plans

Apple Inc's (NASDAQ: AAPL) Chief Executive Tim Cook announced a plan to let the employees from most offices stay and work from home. This is all very unprecedented, and it is due to the coronavirus outbreak. At this moment the measure covers the working week March 9th – 13th. Other big tech companies, with many employees, also decided on similar plans, including Microsoft, Amazon, Salesforce.com Inc. (NYSE: CRM), Intel Corporation (NASDAQ: INTC), Facebook Inc. (NASDAQ: FB) and others. How will this precautionary measure reflect on their results and expectations, we will have to wait and see.

There is more. More and more companies are limiting employees' travels and many tech conferences have been postponed or even canceled. Facebook has canceled its F8 (May 6-8), Google (NASDAQ: GOOG) had to do the same with its I/O conference (May 12-14). Microsoft is still deciding if its Build event, planned for May 19-21 in Seattle, will take place.

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Image by Efes Kitap from Pixabay

 

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