Microsoft and Amazon will fight for the Pentagon's $10B cloud contract


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Amazon and Microsoft are the two final companies in the running for the Defense Department’s $10 billion cloud computing contract. The Pentagon’s migration to the cloud, known as the JEDI project, was announced in 2017, with some of the biggest companies in the world competing for the prize ever since (although Google sat it out, citing “AI principles“).

And just like any reality TV show competition, there’s been a good chunk of drama getting to this point. IBM and Oracle also bid for the contract, but ultimately didn’t cut the mustard. That didn’t stop Oracle from launching a lawsuit accusing an Amazon employee — who had previously worked on JEDI — of having undue influence in proceedings. The Pentagon, however, claims this had “no adverse impact on the integrity of the acquisition process.”

Both Amazon and Microsoft have been focusing heavily on cloud computing in recent times. And while a government contract of this size would be a significant boon to both, motivation for success must certainly be driven by a degree of rivalry between the two competing companies. We’ll find out in mid-July at the earliest who comes out on top.

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Talk key takeaways from Google Cloud Next with TechCrunch writers

Google’s Cloud Next conference is taking over the Moscone Center in San Francisco this week and TechCrunch is on the scene covering all the latest announcements.

Google Cloud already powers some of the world’s premier companies and startups, and now it’s poised to put even more pressure on cloud competitors like AWS with its newly-released products and services. TechCrunch’s Frederic Lardinois will be on the ground at the event, and Ron Miller will be covering from afar. Thursday at 10:00 am PT, Frederic and Ron will be sharing what they saw and what it all means with Extra Crunch members on a conference call.

Tune in to dig into what happened onstage and off and ask Frederic and Ron any and all things cloud or enterprise.

To listen to this and all future conference calls, become a member of Extra Crunch. Learn more and try it for free.

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On balance, the cloud has been a huge boon to startups

Today’s startups have a distinct advantage when it comes to launching a company because of the public cloud. You don’t have to build infrastructure or worry about what happens when you scale too quickly. The cloud vendors take care of all that for you.

But last month when Pinterest announced its IPO, the company’s cloud spend raised eyebrows. You see, the company is spending $750 million a year on cloud services, more specifically to AWS. When your business is primarily focused on photos and video, and needs to scale at a regular basis, that bill is going to be high.

That price tag prompted Erica Joy, a Microsoft engineer to publish this Tweet and start a little internal debate here at TechCrunch. Startups, after all, have a dog in this fight, and it’s worth exploring if the cloud is helping feed the startup ecosystem, or sending your bills soaring as they have with Pinterest.

For starters, it’s worth pointing out that Ms. Joy works for Microsoft, which just happens to be a primary competitor of Amazon’s in the cloud business. Regardless of her personal feelings on the matter, I’m sure Microsoft would be more than happy to take over that $750 million bill from Amazon. It’s a nice chunk of business, but all that aside, do startups benefit from having access to cloud vendors?

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China’s Tencent is raising $6 billion through a bond sale

Tencent, Asia’s largest tech firm, is raising $6 billion after the Hong Kong-listed firm announced a new note sale today.

Tencent last tapped the markets when it raised $5 billion in January 2018. This time around, it is offering a five-tranche bond that is almost in line with reports earlier this week, which speculated that the Chinese giant would look to raise $5 billion. The notes will be issued on April 11, Tencent said.

It isn’t clear how the new capital will be spent — Tencent didn’t include details in its announcement and the company had not responded to a request for comment at the time of writing.

“We have a strong balance sheet with significant cash position and a rich pool of listed securities. Going forward, we will continue to exercise discipline in our financial management and focus on maintaining the right balance between capital expenditure, investments and returns,” CFO John Lo said in a statement.

Tencent is most famous for WeChat, China’s go-to messaging app that has become the mobile internet in the country, in addition to its lucrative gaming business, as well fintech, cloud, social media and other verticals. It is also increasingly striking investment deals with companies outside of China, having backed the likes of Reddit, Snap and Tesla and a clutch of public Chinese businesses.

The company’s star rose to a peak at the end of 2017 when it became Asia’s first $500 billion company, but it has been a mixed journey since then. Tencent largely struggled to maintain its high standards last year as a Chinese government freeze on issuing new licenses for games cut into its money-making ability and left investors skittish.

There are positive signs in 2019, however. China’s game licensing process has resumed and the company returned to profit growth thanks to its investment in Meituan, which went public in a massive $4 billion IPO. A major reorganization was undertaken to lessen Tencent’s financial reliance on gaming and, while the most recent quarter disappointed overall, ’emerging’ business units like social media, cloud computing and fintech saw positive growth. The company’s stock price is up some 20 percent from the end of 2019, giving the firm a market cap of around $456 billion.

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Cloud Foundry ❤ Kubernetes

Cloud Foundry, the open source platform-as-a-service project that more than half of the Fortune 500 companies use to help them build, test and deploy their applications, launched well before Kubernetes existed. Because of this, the team ended up building Diego, its own container management service. Unsurprisingly, given the popularity of Kubernetes, which has become somewhat of the de facto standard for container orchestration, a number of companies in the Cloud Foundry ecosystem starting looking into how they could use Kubernetes to replace Diego.

The result of this is Project Eirini, which was first proposed by IBM. As the Cloud Foundry Foundation announced today, Project Eirini now passes the core functional tests the team runs to validate the software releases of its application runtime, the core Cloud Foundry service that deploys and manages applications (if that’s a bit confusing, don’t even think about the fact that there’s also a Cloud Foundry Container Runtime, which already uses Kubernetes, but which is mostly meant to give enterprise a single platform for running their own applications and pre-built containers from third-party vendors).

a foundry for clouds“That’s a pretty big milestone,” Cloud Foundry Foundation CTO Chip Childers told me. “The project team now gets to shift to a mode where they’re focused on hardening the solution and making it a bit more production-ready. But at this point, early adopters are also starting to deploy that [new] architecture.”

Childers stressed that while the project was incubated by IBM, which has been a long-time backer of overall Cloud Foundry project, Google, Pivotal and others are now also contributing and have dedicated full-time engineers working on the project. In addition, SUSE, SAP and IBM are also active in developing Eirini.

Eirini started out as an incubation project, and while few doubted that this would be a successful project, there was a bit of confusion around how Cloud Foundry would move forward now that it essentially had two container engines for running its core service. At the time, there was even some concern that the project could fork. “I pushed back at the time and said: no, this is the natural exploration process that open source communities need to go through,” Childers said. “What we’re seeing now is that with Pivotal and Google stepping in, that’s a very clear sign that this is going to be the go-forward architecture for the future of the Cloud Foundry Application Runtime.”

A few months ago, by the way, Kubernetes was still missing a few crucial pieces the Cloud Foundry ecosystem needed to make this move. Childers specifically noted that Windows support — something the project’s enterprise users really need — was still problematic and lacked some important features. In recent releases, though, the Kubernetes team fixed most of these issues and improved its Windows support, rendering those issues moot.

What does all of this mean for Diego? Childers noted that the community isn’t at a point where it’ll hold developing that tool. At some point, though, it seems likely that the community will decide that it’s time to start the transition period and make the move to Kubernetes official.

It’s worth noting that IBM today announced its own preview of Eirini in its Cloud Foundry Enterprise Environment and that the latest version of SUSE’s Cloud Foundry-based Application Platform includes a similar preview as well.

In addition, the Cloud Foundry Foundation, which is hosting its semi-annual developer conference in Philadelphia this week, also announced that it has certified its first to systems integrators, Accenture and HCL, as part of its recently launched certification program for companies that work in the Cloud Foundry ecosystem and have at least ten certified developers on their teams.

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