Once all of the pentagon is integrated with Azure, after the 10 years are up, it will be very unlikely for Pentagon to want to switch, not only due to costs, but everyone will have been trained specifically for handling Azure.
This gives Microsoft a massive lead in terms of government infrastructure and all but guarantees we'll be seeing more and more contracts handed to Azure.
https://www.wired.com/2010/08/hp-holds-navy-network-hostage/
Politics nowadays are just way too unpredictable and destructive. Just best not to be anywhere near it when, say, cost overruns on this project happen and you still haven't delivered anything the DoD is actually using.
How? AWS already has 3 entire regions dedicated to the US government and those aren't going away anytime soon.
Note: Pentagon != all US govt agencies
it is a maximum of $10Billion ...over 10 years
But, government contracts are pretty beholden to a tight, static budget. Once the money is gone, it's gone. You can't necessarily go ask for additional taxes and budget for the year. Many times, you literally cannot go over budget no matter what. The pay-as-you go, variable pricing you get in the cloud, is actually a challenge in government budget.
In the private sector, when you go over budget..funds can be found elsewhere in the company, etc.
But, it is a maximum of $10Billion ...over 10 years. Th at is the key thing to focus on. I'm sure both companies have private sector customers right now that pay a quarter to half-billion a year right now.
I think the greater damage is optics vs financial..and optics can cost a lot.
Let's say AWS makes $30-Billion this year. So, losing $1-billion this year is 3.33%? (Though I'm sure the contract starts not this year?)...How much will AWS be making in 10 years?