President Donald Trump has been a vocal critic of Amazon in general and of CEO Jeff Bezos in particular — as well as the Washington Post, the Bezos-owned newspaper that has published much reporting critical of the president.
Reports indicate that Trump's opposition to Amazon went as far as the bidding process for the Pentagon's $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract, which the Amazon Web Services cloud computing division was the favorite to win.
Earlier this year, Trump had reportedly wanted to "scuttle" the JEDI bidding process over concerns that Amazon would get the deal. Even before that, Trump last year reportedly ordered former Defense Secretary James Mattis to "screw Amazon" out of the contract, according to an upcoming book. Indeed, back in August, Sen. Mark Warner, a Democrat, raised concerns that Trump would use JEDI as a means to punish his critics in the media.
So when on Friday, the Department of Defense announced that Microsoft had scored the JEDI contract, the immediate reaction of many bystanders was to assume that the huge upset over AWS had everything to do with Trump.
However, several industry experts and Wall Street analysts say that they believe any Trump factor in the JEDI decision was overrated, and that all signs point to Microsoft having won the deal on its own merits as a heavy hitter in the cloud computing space.
'I hesitate to say that Trump was the reason'
"I hesitate to say that Trump was the reason behind Amazon not winning this," James Bach, a federal spending analyst at Bloomberg LP, told Business Insider. "Microsoft was more than capable of winning this without any kind of influence."
At the same time, Bach said, it's definitely "atypical" for a president to get involved with this kind of government procurement contract at all.
Daniel Newman, founding partner and principal analyst at Futurum Research, told Business Insider that Trump's involvement with the deal does cast questions over the final result.
"You have two very very sound companies, and then you have all these extraneous factors like Trump…it's really disappointing that we couldn't see an award made strictly based upon what solution offered the best technology to meet the needs," Newman said.
Still, several of the experts we spoke with said that Microsoft, and its Azure cloud platform, is more than up to the task of helping the Pentagon modernize its IT infrastructure.
"They had not only infrastructure that could take on Amazon's but they also had experience working in this legacy IT environment, so it makes sense that the DoD might choose Microsoft for that, because Microsoft has this ability to do the next gen IT migration and at the same time help them manage and rationalize their legacy footprint," Bach said.
While Microsoft lacked the necessary capabilities to qualify for JEDI at the outset of the bidding process, experts said that the company has made great strides in closing its technology gap with Amazon Web Services — and all the while making itself more attractive to customers in regulated industries like the public sector.
"MSFT has worked hard to appeal to late adopting industries, such as government, healthcare, financial institutions. MSFT has been prudent in gaining compliance/governance certifications and improving security to win over these late adopters," Oppenheimer analysts said in a note to clients on Sunday.
Politics still play a role
However, whether or not Trump himself played a role in the JEDI procurement process, some experts said that politics may still have factored into the decision to award it to Microsoft.
Putting aside Trump's personal stance, the retailer has come under fire from key Democrats like presidential candidate Sen. Elizabeth Warren, who has said that tech titans like Amazon wield too much power and should be broken up.
"Politics likely played a key role as AMZN has been under government scrutiny from both the left and right," the Oppenheimer analysts said of the JEDI deal.
Additionally, after spending much of the last year fending off an ultimately-failed lawsuit from Oracle over the JEDI award process, Amazon's relationships with the DoD have been somewhat strained, Christopher Cornillie, a federal technology market analyst at Bloomberg Government, told Business Insider.
"[The] JEDI court battle made everyone aware of how aggressively Amazon was pursuing federal contracts. They spent millions a year on lobbying and strategically hired a number of former government officials they believed would give them an edge in upcoming procurements. This was on display with JEDI," Cornillie said.
A silver lining for Amazon
It's unlikely that the JEDI story ends here for Amazon.
Amazon on Friday was "still evaluating options," a person familiar told Business Insider. Wedbush analyst Daniel Ives said in a note to clients on Friday that his firm "fully" expected Amazon "and others" to challenge the JEDI decision in court.
Oddly enough, however, at least one expert thinks that the shadow of Trump over the JEDI deal may end up actually helping Amazon Web Services in the long run. At least some arms of the government might feel a need to show that they're willing to choose the best technology, no matter who it comes from.
"That could mean that any government project that Amazon pursues might be similarly affected by Trump's dislike," Charles King, the president and principal analyst of Pund-IT, told Business Insider. "But it might also lead other agencies to treat Amazon leniently in order to demonstrate that they aren't being inappropriately swayed by the President."
Another silver lining, King said, is that even the possibility that there was a political motive for giving JEDI to Microsoft might actually "lend weight to whatever efforts that AWS might make to reverse or appeal the contract being awarded to Microsoft."