- Amazon wants the decision to award a government cloud computing contract to Microsoft rescinded.
- The e-commerce behemoth is a leading spender on lobbying, far outstripping its rivals.
- Jeff Bezos could learn a lot from Tim Cook on how to handle Washington, D.C.
After the U.S. military awarded a cloud computing contract to Microsoft two months ago, Amazon (NASDAQ:AMZN) recently filed a lawsuit to protest the move.
In the suit filed at the U.S. Court of Federal Claims, Amazon argues that the decision by the U.S. Department of Defense to give Microsoft the Joint Enterprise Defense Infrastructure (JEDI) program contract was influenced by President Donald Trump.
Is this true? A look at what the online retail giant spends on lobbying compared to Microsoft suggests that Amazon is picking the wrong fight. If anything, the loss of the lucrative contract is largely Amazon’s own fault.
As the world’s undisputed leader in cloud computing, Amazon should have had the JEDI contract in the bag. Even before the contract was awarded in October, the e-commerce behemoth had long emerged as a front runner. Additionally, Amazon was the only cloud provider bearing the highest security certification – level 6. The eventual winner Microsoft is still seeking this certification
Why Amazon lost to Microsoft
If Amazon is looking for where to place the blame for losing the contract, it need not look any further than in its poor relationships and brand reputation in Washington, D.C. Amazon can only boast of a big lobbying budget but small returns on investment.
Being a top-ten spender on lobbying this year, the online retailer deserves more bang for its buck. As a demonstration of how poorly it is being served, Amazon has far outspent other companies that have better relationships in D.C. For a corporation as demanding of its employees as Amazon, the e-retailer is surely doing a poor job at getting its money’s worth from lobbying.
According to the Center for Responsive Politics, Amazon has spent nearly double what Microsoft has allocated for lobbying purposes. Yet Microsoft seems to have better relationships in D.C.
So far in 2019, Microsoft has allocated $7.8 million to lobbying. Amazon, on the other hand, has so far spent $12.4 million. You don’t need to be a math whizz to figure out which tech giant is getting the relatively better returns on their investment.
Amazon vs Microsoft: Who’s getting the best ROL (Return on Lobbying)?
Other than losing the lucrative JEDI contract, Amazon’s image in D.C. is poor. It’s currently one of the few U.S. corporations that invites the ire of Democrats and Republicans alike. Amazon has become a constant target of attack from the president with the company’s founder and CEO even earning himself the nickname “Jeff Bozo” from Trump.
Equally, the online retailer has been a target of scathing criticisms from Democrats such as House Rep Alexander Ocasio-Cortez and Senator Bernie Sanders. Besides Facebook, Amazon is perhaps the only other big tech firm whose reputation and in the U.S. political capital is in such dire straits!
But what about Apple?
Amazon could argue that it was denied the JEDI contract because of the founder’s politics. But if that were the case, then other tech companies would equally be in poor standing, especially with the president. A case in point is Apple.
The iPhone maker’s CEO, Tim Cook, has openly disagreed with Trump on several issues. This includes on polarizing matters such as Trump’s response to the violence experienced during a neo-Nazi rally in Charlottesville, Virginia two years ago. Cook has also criticized the Trump administration’s immigration policies, a signature issue for the president.
But even that being the case, Cook has managed to obtain ‘favors’ for Apple. This includes getting iPhones exempted from tariffs imposed on Chinese imports. As a lesson for Amazon, these favors don’t come from an over-sized lobbying budget. So far in 2019, Apple has spent $5.5 million on lobbying, nearly a third of what the online retail giant has spent this year.
As the year comes to a close and Amazonians gear up for an annual performance review, it is time the retail giant sat down its lobbyists too. They need to up their game.