Amazon took a swipe at Microsoft’s cloud computing technology performance this week, calling out the company’s “spotty operational performance during the COVID-19 crisis.”
The dig was part of the ongoing battle over the Pentagon cloud contract. Amazon is once again challenging the Department of Defense’s decision to award the $10 billion JEDI contract to Microsoft. Amazon filed a protest of the award this week directly with the DoD after a federal judge temporarily paused litigation on a lawsuit filed last year.
Microsoft communications chief Frank Shaw published a blog post Thursday accusing Amazon of attempting to “find a way to avoid the consequences of its own bad business decisions.”
Amazon responded to Microsoft with its own blog post published Friday, which lays out the reasons for the appeal to the DoD and includes the dig at Microsoft over cloud performance. Microsoft has dealt with some capacity constraints due to increased cloud computing usage amid the pandemic. Some customers have reported hitting capacity limits. The Information reported last month about Azure struggling to meet demand even before the COVID-19 outbreak.
“Microsoft is doing an awful lot of posturing,” Amazon communications chief Drew Herdener wrote. “We understand why. Nobody knowledgeable and objective believes they have the better offering. And, this has been further underscored by their spotty operational performance during the COVID-19 crisis (and in 2020 YTD).”
Amazon Web Services has long been the cloud infrastructure market leader, though Microsoft Azure has gained momentum in recent years. Both Amazon and Microsoft are investing heavily in various COVID-19-related initiatives.
Cloud services have helped fuel revenue for tech giants over the past few months as more people and businesses rely on the internet amid the pandemic.
Results reported last week from Amazon, Apple, Microsoft and Google show they benefited, to varying degrees, from their efforts to expand beyond their traditional businesses and move further into cloud infrastructure and subscription services in recent years.
“A surge in demand for online collaboration tools, ecommerce and consumer cloud services drove sharp increases in cloud infrastructure consumption, benefiting all the major cloud providers,” research firm Canalys explains in a new report, showing overall spending on cloud infrastructure services growing 34% to $31 billion in the first quarter. “But this was offset by a slowdown in large complex enterprise migrations and transformational cloud projects as businesses called a halt to all but the most important IT tasks as lockdowns took effect.”
Amazon Web Services posted net sales of $10.2 billion in the first quarter, an increase of nearly 33% from a year ago, and profits of more than $3 billion. Amazon’s total operating profit declined 10% to $4 billion, but without AWS, operating profits for the company would have been below $1 billion.
Microsoft’s commercial cloud revenue rose 39% to $13.3 billion, representing 38% of the company’s overall revenue of $35 billion for the quarter. Commercial cloud includes Office 365 Commercial, Microsoft Azure, and commercial portions of LinkedIn, Dynamics 365 and other Microsoft cloud businesses.
