Donald Trump does not conduct the business of government in a conventional manner. Whatever you think of the 45th President of the United States, it difficult to argue with that statement. It is also fair to say that the President is pugnacious, perhaps prone to a grudge or two. So, it should be with great interest that we hear the decision of the Pentagon on the award of a $10 billion “JEDI” cloud computing contract, which is expected to be announced sometime in July.
There are two candidates for the contract, Amazon, through its Amazon Web Services (AWS) arm, and Microsoft, through its partnership with cloud services specialist Oracle. $10 billion might almost seem like loose change to those behemoth companies, who have both been (briefly) valued at over one trillion dollars in the past year, but creating a relationship with the US military could stand for a lot in an area that is certainly going to grow in the coming years.
Trump’s issues with Bezos matter of record
The thing is: We don’t really know how President Trump feels about Microsoft, but we have a good idea of what he thinks about Jeff Bezos, and it isn’t positive. None of that is meant to suggest that the President will take steps to influence the decision, nor that the Pentagon will act improperly in its processes. But politics do matter in these situations, even if it is on a subconscious level.
AWS has been a huge driver of Amazon’s success on the stock market, making it one of the most popular stocks for free trading on fintech platforms. The cloud computing services represented around 10% of Amazon’s total revenue in 2018, but it was increasingly important to its profits thanks to ultra-high margins in the sector. Indeed, the profit margins from AWS are often cited as one of the reason Amazon can keep retail prices so low.
Big Tech break-up still on the cards
While the likes of Jeff Bezos might fear the wrath of Mr Trump, their concerns might be misplaced. Trump has been vocal about his concerns with Big Tech, even recently suggesting that the big US firms colluded with Democrats against him. In an an interview with CNBC, the President said “You know people talk about collusion. The real collusion is between the Democrats and these companies, cause they were so against me during my election run, everybody said if you don’t have them, you can’t win.” In the interview, the President also seemed to praise the record fines handed down by the EU for anti-trust violations.
We mentioned earlier that Mr Trump is irrefutably unconventional, yet, regardless of your political persuasion, it is also hard to deny that the President is unpredictable. The CNBC interview should be taken with a pinch of salt. What is clear, however, is how some of Trump’s 2020 challengers feel about Big Tech. Bernie Sanders thoughts on Amazon are well documented, but Elizabeth Warren has even offered a blueprint of how she would break up Big Tech companies if elected President next November. For Big Tech, they might prefer to stick with the devil they know in the current occupant of the White House.
