Oct 28, 2019

Axios Login

By Ina Fried
Ina Fried

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Today's Login is 1,211 words, a 4-minute read.

1 big thing: Microsoft's DoD contract win opens new battles

Illustration: Lazaro Gamio/Axios

Friday's announcement that the Defense Department chose Microsoft over Amazon for a huge cloud computing contract will set two new battles in motion, one procedural and one political.

Amazon's lawyers will likely challenge the decision, while 2020 Democratic candidates will line up to charge the Pentagon with putting its hand on the scales to please President Trump.

The big question: What degree did politics play a role in Microsoft's win?

  • Trump's animus toward Amazon and Jeff Bezos is well documented.
  • A new book reports that Trump told former Defense Secretary Jim Mattis in summer of 2018 to "screw Amazon" out of the deal.
  • Mattis reportedly rebuffed the president — but he's gone now, and Amazon lost.

For Microsoft, the huge victory is also likely to renew debate among employees over the company's government work, particularly defense and immigration contracts.

  • Microsoft President Brad Smith has made it plain that the company will continue doing work with all parts of the government, including the military.
  • One new issue: Microsoft invested in an Israeli startup that uses facial recognition for surveillance of Palestinians in the West Bank, according to NBC News. "If we discover any violation of our principles, we will end our relationship," the company told NBC.

An Amazon challenge seems inevitable — and it might even get a boost from Congressional investigators.

  • "It's crystal clear here that the President of the United States did not want this contract to be awarded to one of the competitors," Franklin Turner, an attorney with the law firm McCarter & English, told the Washington Post. "It's a virtual guarantee that Amazon is going to pull out all the stops to check the government's math on this one."

What they're saying:

  • Microsoft: "We brought our best efforts to the rigorous JEDI evaluation process and appreciate that DOD has chosen Microsoft. We are proud that we are an integral partner in DOD's overall mission cloud strategy."
  • Amazon (per GeekWire): "We're surprised about this conclusion. AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly leads to a different conclusion."
  • Conservative lawyer and Trump critic George Conway, on Twitter: "This is impeachable."
  • Box CEO Aaron Levie, on Twitter: "Cloud computing. Government procurement conspiracies. Revenge. For all of us in enterprise software, this is about as exciting as it gets."

Between the lines: The contract, a 10-year deal to put a big chunk of the Defense Department's current and future computing needs into the cloud, was controversial even before this point.

  • The Pentagon's choice to go with a single vendor rather than multiple providers drew complaints last year from critics who said it favored Amazon.
  • The Defense Department's criteria led to both Oracle and IBM being declared out of the running. Google withdrew as well.
  • Some GOP congressmen had also asked the president to delay the awarding of the contract until the possibility of a pro-Amazon bias could be further investigated.
  • Microsoft, for its part, tried to keep its head down and add required capabilities and certifications to its cloud systems — a number of which it didn't have 18 months ago — in order to be eligible to win the bid.

The bottom line: By politicizing an essentially bureaucratic and technical decision with his attacks on an individual company, Trump insured that this process would be a mess — and a no-win choice for the Pentagon.

My thought bubble: The decision is yet another sign that Microsoft is winning the techlash.

2. Google's culture of transparency under strain

Leaked audio from a Google internal meeting is sparking renewed debate over just how much the company really wants its employees speaking out.

Driving the news: The most recent issue has been Google's hiring of Miles Taylor, who worked as chief of staff for Homeland Security Secretary Kirstjen Nielsen.

  • In recent months, employees have also pushed the company on a range of issues, from how it handles sexual harassment complaints to what types of work it does for the U.S. government.

"We are genuinely struggling with some issues — transparency at scale," CEO Sundar Pichai said in an internal meeting last week, as reported by the Washington Post.

Between the lines: That's a subtle shift from when I interviewed Pichai earlier this year for "Axios on HBO." At the time, Pichai downplayed the notion that workers were speaking out too much, or even that there was such a thing.

  • "We have encouraged our employees to speak up," he said during an unaired portion of the interview. "And it gives us a lot of insight. I've seen situations where other companies can be blind to potential issues or concerns, so I've always viewed it as a valuable way by which we get feedback."

But, I pressed, could there ever be too much of a good thing?

  • At least at the time, Pichai suggested he wanted employees to keep making their voices heard. "You know, if it's, if it's a valid concern, a real concern, I always want to hear about it," he said. "I've never felt it's an undue burden for how I need to do my job."
3. Harris says Big Tech shouldn't profit from hate

Photo: Axios on HBO

As part of her "Axios on HBO" interview, Sen. Kamala Harris talked about the need to ensure that tech companies don't profit from hate and aren't being used to manipulate elections.

  • Without saying Facebook should be broken up, Harris did say, "There are some of the mergers of Facebook that I think should not have gone through for sure."

Why it matters: Many in D.C. have come to support greater regulation of tech companies, but there's a wide disparity on what the remedies should be, even among the 2020 Democratic candidates.

  • In particular, Harris took the tech companies to task for allowing extreme forms of online bullying like revenge porn, which she said should more properly be termed cyber exploitation.
  • "There needs to be consequence and there needs to be rules in place and regulation when we are talking about the tech companies profiting off of hate," Harris told Axios politics editor Margaret Talev.
4. Facebook yanks group's false campaign ad

Facebook pulled an ad over the weekend that falsely suggested that Sen. Lindsey Graham had endorsed the Green New Deal.

No, Facebook hasn't changed its policy allowing political candidates to lie at will in advertisements. In this case, though, it was a third-party political action committee making the allegation and Facebook doesn't give such groups the same exemption as candidates themselves.

Between the lines: When CEO Mark Zuckerberg testified last week before a House committee, Rep. Alexandria Ocasio-Cortez asked if she could run an ad claiming Republicans had supported, for example, the Green New Deal. Zuckerberg said she probably could.

  • A third-party group decided to do just that, suggesting Graham had endorsed the environmental proposal.

Why it matters: Facebook's free pass for political lies has prompted legislators like Ocasio-Cortez and presidential candidate Sen. Elizabeth Warren to test the policy's limits, but so far, there don't seem to be any — as long as you're a politician.

5. Take Note

On Tap

  • The Money 2020 conference takes place through Wednesday Las Vegas.
  • It's another busy week of earnings reports. Google and Spotify are set to report today; AMD and Electronic Arts on Tuesday; Apple, Facebook and Lyft on Wednesday; and Pinterest on Thursday.


6. After you Login
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Ina Fried