Business

Red Hat has friends in the clouds. That could help it get a piece of a Pentagon contract.

The Pentagon is expected to award its Joint Enterprise Defense Infrastructure contract to Microsoft or Amazon, but Red Hat could also benefit as a back-end provider of the software used to run the cloud.
The Pentagon is expected to award its Joint Enterprise Defense Infrastructure contract to Microsoft or Amazon, but Red Hat could also benefit as a back-end provider of the software used to run the cloud. Google

A major contract from the U.S. Department of Defense could benefit some workers in the Triangle.

Red Hat leaders have been talking to defense officials about its JEDI cloud-services contract and think the company is "extremely well-positioned" to supply the project's back-end workings, Red Hat Chief Financial Office Eric Shander said in a recent interview.

The JEDI contract — short for Joint Enterprise Defense Infrastructure — is likely to go to one of the cloud industry's biggest players, companies like Microsoft, IBM or Amazon. Reports indicate it's potentially worth about $10 billion to the winning firm.

But it takes software to run a cloud and in recent years Raleigh-based Red Hat has adjusted its mix of Linux-based open-source offerings both to handle the job and allow customers to move applications there with relative ease.

It also has solid working relationships with the major cloud providers, so "regardless of who they choose and whether they go public or private, our software is going to work for them," Shander said of the Defense Department. "We're well-positioned with the products we're talking to them about."

Shander added that because customer assessments of back-end technology and cloud services usually run in parallel, a decision about the back-end software should happen "very shortly" after the Defense Department chooses a cloud provider.

Of course, that presumes the department eventually goes ahead with a project that's slowly becoming mired in a Beltway procurement squabble.

Defense officials are interested in signing on with a commercial cloud provider in hopes of simplifying, at least to some extent, the military's vast computing effort.

Right now, the "lack of a coordinated enterprise-level approach to cloud infrastructure makes it nearly impossible for our warfighters and leaders to make critical data-driven decisions at 'mission-speed,'" they said in April, in their second draft of a memo that will explain to would-be bidders the department's goals for the JEDI project.

They were supposed to have turned the draft into an actual request for bids by now, but have yet to follow through. At the beginning of June, Defense spokeswoman Dana White said officials believe "it's important that we don't rush toward failure."

What's making the project controversial is that the Defense Department has signaled it wants to award the contract to a single cloud provider, and its prospective specifications include terms that could make it difficult for any company but Amazon or Microsoft to successfully compete for it.

That has triggered grumbling from Oracle and others in the industry, and questions in Congress about whether the department would be better-advised to give the work to several cloud companies.

It's far from unheard-of for major federal-government procurement efforts to run into such problems, and indeed for them to eventually spark legal challenges.

For example IBM — which has signaled interest in bidding on the JEDI deal — protested a 2013 decision by the CIA to give a $148 million cloud-computing contract to Amazon. But its challenge failed after a judge ruled its $94 million competing offer was both technically inferior and dubiously priced.

But any machinations between the Pentagon and the cloud providers are beside the point for Red Hat, which has deals and technology in place with Amazon, Microsoft, IBM and others that allow its software to work with each of the major platforms.

So "our solution is not going to change depending on which cloud provider they select," Shander said.



Ray Gronberg: 919-419-6648, @rcgronberg



  Comments