Amazon, Microsoft and Google in talks for $1bn Boeing cloud deal – report

By Robert Scammell

Aerospace company Boeing is reportedly in talks with Amazon, Microsoft and Google to provide multi-year cloud services said to be worth at least $1bn.

The world’s largest cloud vendors are currently in a bidding process for the sizable deal, according to The Information’s sources.

As a company employing more than 140,000 people and one which needs to handle enormous amounts of data from aviation, rockets and satellites, Boeing has a sizable IT footprint.

It currently relies on multiple cloud and IT providers. In 2016 Boeing chose to run its analytics applications on Microsoft’s Azure cloud computing service.

Andy Jassy, the CEO of Amazon Web Services (AWS) who is due to take over as chief executive of parent company Amazon this July, is reportedly directly involved in the Boeing negotiations.

Boeing declined to comment on the report, as did Google. Microsoft said it did not comment on rumours or speculation. AWS did not return Verdict’s request for comment.

According to GlobalData forecasts, the data centre market will become a $948bn industry by 2030. Multi-year, large scale cloud deals are lucrative opportunities for hyperscalers and according to The Information AWS sees the Boeing contract as a “must-win deal”.

In October 2019, the US Department of Defense awarded Microsoft the $10bn JEDI contract amid fierce competition from AWS, IBM and Oracle.

Amazon has challenged that decision in a lawsuit, claiming that the Pentagon was influenced by then-President Donald Trump’s personal dislike of Amazon CEO Jeff Bezos. An internal investigation found no improper influence from the White House. Legal challenges continue, raising the possibility that the Pentagon might cancel the contract and start afresh.

Thanks to first-mover advantage AWS has consistently been the market leader in cloud since launching in 2006 – but rivals Microsoft and Google have been making steady ground. Google remains in the number three position, but this is mainly a matter of sales rather than capability. The web giant already has colossal resources around the world in terms of data centres and bandwidth, all ready to serve business cloud customers, because it needs them for existing tasks such as streaming YouTube videos.

Earlier this year Boeing agreed to pay $2.5bn to settle criminal charges after it covered up information to US safety officials regarding its 737 Max aircraft.