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Microsoft Beats Amazon for Pentagon $10 Billion Cloud Computing Contract

WASHINGTON, Oct 25 (Reuters) – Microsoft Corp. has won the Pentagon’s $10 billion cloud computing contract, the Defense Department said on Friday, beating out favorite Amazon.com Inc.

The contracting process had long been mired in conflict of interest allegations, even drawing the attention of President Donald Trump, who has publicly taken swipes at Amazon and its founder Jeff Bezos. Trump in August said his administration was reviewing Amazon’s bid after complaints from other companies.

The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract is part of a broader digital modernization of the Pentagon meant to make it more technologically agile. Specifically, a goal of JEDI is to give the military better access to data and the cloud from battlefields and other remote locations.

Oracle Corp had expressed concerns about the award process for the contract, including the role of a former Amazon employee who worked on the project at the Defense Department but recused himself, then later left the Defense Department and returned to Amazon Web Services.

In a statement, an Amazon Web Services (AWS) spokesman said the company was “surprised about this conclusion.”

The company said that a “detailed assessment purely on the comparative offerings” would “clearly lead to a different conclusion,” according to the statement.

AWS is considering options for protesting the award, a person familiar with the matter told Reuters.

Although the Pentagon boasts the world’s most potent fighting force, its information technology remains woefully inadequate, according to many officials.

Officials have complained of having outdated computer systems and being unable to access files or share information as quickly as they might be able to in the private sector.

“If I am a warfighter, I want as much data as you could possibly give me,” Lieutenant General Jack Shanahan, the director of the Joint Artificial Intelligence Center, told reporters in August describing the importance of the contract.

Some companies were concerned that a single award would give the winner an unfair advantage in follow-on work. The Pentagon has said it planned to award future cloud deals to multiple contractors.

This week, U.S. Defense Secretary Mark Esper removed himself from reviewing the deal due to his adult son’s employment with one of the original contract applicants, IBM Corp. IBM had previously bid for the contract but had already been eliminated from the competition.

Microsoft said it was working on a comment. IBM and Oracle did not immediately return requests for comment.

In a book slated for publication Oct. 29, retired Navy commander Guy Snodgrass, who served as a speech writer to former Defense Secretary Jim Mattis, said Trump called Mattis and directed him to “screw Amazon” by preventing it from bidding on the JEDI contract, according to an excerpt of the book seen by Reuters ahead of its release.

“We’re not going to do that,” Mattis later told other Pentagon officials, according to the excerpt. “This will be done by the book, both legally and ethically.”

Snodgrass declined to comment pending the release of his book.

In a statement announcing Microsoft as the winner, the Pentagon underscored its view that the competition was conducted fairly and legally.

“All (offers) were treated fairly and evaluated consistently with the solicitation’s stated evaluation criteria. Prior to the award, the department conferred with the DOD Inspector General, which informed the decision to proceed,” it said.

Microsoft shares were up 3% to $144.98 in after-hours trading after the news. Amazon shares were down 0.92% to $1,745.12.

The Pentagon said it had awarded more than $11 billion across 10 separate cloud contracts over the past two years.

“As we continue to execute the DOD Cloud Strategy, additional contracts are planned for both cloud services and complementary migration and integration solutions necessary to achieve effective cloud adoption,” the Pentagon said.

(Additional reporting by Stephen Nellis and Jeffrey Dastin in San Francisco Reporting by Phil Stewart in Washington; Editing by Cynthia Osterman, Sonya Hepinstall and Lincoln Feast)

Ariane 6 Rocket Seeks First Commercial Deals

BREMEN, Germany (Reuters) – Ariane 6, Europe’s next-generation space rocket, is expected to win its first two commercial launch orders in coming weeks, company officials said, a key milestone as the European launcher vies for orders against Elon Musk’s U.S. competitor SpaceX.

Operator Arianespace faces increased competition from SpaceX and Blue Origin, owned by Amazon CEO Jeff Bezos. Japan and India also pose a growing challenge.

Ariane 6 has three institutional orders in hand from the European Commission and France and is close to signing deals with two commercial customers, said Mathias Spude, spokesman for ArianeGroup, a joint venture of Airbus and Safran, that is the majority stakeholder in Arianespace.

ArianeGroup has invested 400 million euros (£347 million) of its own funds in the 3.4-billion-euro development of Ariane 6 – a project key to ensuring Europe’s independent access to space and a market valued at over $1 trillion by 2040.

Manufacturers say the rocket will be more versatile than Ariane 5, able to carry out missions from placing as many as 90 small satellites in low-earth orbit to taking classic spy satellites to far higher perches in geostationary orbit.

But the business case depends on drumming up enough commercial business to augment the 5-6 institutional launches expected in Europe annually in coming years, about a quarter of those planned in the United States.

European governments also face industry pressure to use Ariane 6 even if they could get cheaper rides using SpaceX.

“Europe continues to need its own access to space – the market of the future,” said Matthias Wachter with the BDI German Federation of Industry. “It doesn’t make sense to use European tax money to develop our own rocket but then launch satellites with competitors from the United States or Asia.”

Ariane 6, due for a first launch in 2020, was designed to save significant costs compared to Ariane 5, but industry experts say it will still cost around 70 million euros per launch – well above the rate offered by SpaceX, which uses reusable rocket technology and can count on larger U.S. orders.

Ariane 6’s designers insist innovative production techniques will favour the European launcher when the commercial market recovers from a recent slump.

“When it wakes up … we will be on the market with a rocket that is 40 percent cheaper, and will continue to reduce costs after that,” Spude told Reuters at the Ariane 6 production site.

Still, experts say SpaceX is widely credited with jolting the overall market with a keen focus on cutting costs, forcing Europe to shake up its launch industry.

(Reporting by Andrea Shalal, Editing by Tim Hepher)

Virgin Galactic Crew Takes Off For Space

MOJAVE, Calif., Dec 13 (Reuters) – A Virgin Galactic space tourism vehicle took off from California’s Mojave desert under clear skies on Thursday bound for the fringes of space, a mission that if successful would mark the first U.S. human flight beyond the atmosphere since the end of America’s shuttle program in 2011.

The test flight foreshadows a new era of civilian space travel that could kick off as soon as 2019, with British billionaire Richard Branson’s Virgin Galactic battling other billionaire-backed ventures, like Amazon.com founder Jeff Bezos’ Blue Origin, to be the first to offer suborbital flights to fare-paying tourists.

In the first steps before a high-altitude rocket launch, Virgin’s twin-fuselage carrier airplane holding the SpaceShipTwo passenger spacecraft took off soon after 7 a.m. local time (10 a.m. ET) from the Mojave Air and Space Port, about 90 miles (145 km) north of Los Angeles.

Richard Branson, wearing a leather bomber jacket with a fur collar, attended the take-off along with hundreds of spectators on a crisp morning in the California desert.

If all goes according to plan, the carrier airplane will haul the SpaceShipTwo passenger rocket plane to an altitude of about 45,000 feet (13.7 kms) and release it. Seconds later, SpaceShipTwo will fire, catapulting it to at least 50 miles (80.47 km) above Earth, high enough for the pilots to experience weightlessness and see the curvature of the planet.

Virgin’s latest flight test comes four years after the original SpaceShipTwo crashed during a test flight that killed the co-pilot and seriously injured the pilot, dealing a major setback to Virgin Galactic, a U.S. offshoot of the London-based Virgin Group.

“We’ve had our challenges, and to finally get to the point where we are at least within range of space altitude is a major deal for our team,” George Whitesides, Virgin Galactic’s chief executive, told reporters during a facilities tour on Wednesday in Mojave, where workers could be seen making pre-flight inspections of the rocket plane.

While critics point to Branson’s unfulfilled space promises over the past decade, the maverick businessman told a TV interviewer in October that Virgin’s first commercial space trip with him onboard would happen “in months and not years.”

Thursday’s test flight will have two pilots onboard, four NASA research payloads, and a mannequin named Annie as a stand-in passenger. More than 600 people have paid or put down deposits to fly aboard Virgin’s suborbital missions, including actor Leonardo DiCaprio and pop star Justin Bieber. A 90-minute flight costs $250,000.

Short sightseeing trips to space aboard Blue Origin’s New Shepard rocket are likely to cost around $200,000 to $300,000, at least to start, Reuters reported in July. Tickets will be offered ahead of the first commercial launch, and test flights with Blue Origin employees are expected to begin in 2019.

Other firms planning a variety of passenger spacecraft include Boeing Co, Elon Musk’s SpaceX and late Microsoft co-founder Paul Allen’s Stratolaunch.

In September, SpaceX said Japanese billionaire Yusaku Maezawa, founder and chief executive of online fashion retailer Zozo, would be the company’s first passenger on a voyage around the moon on its forthcoming Big Falcon Rocket spaceship, tentatively scheduled for 2023.

Musk, the billionaire CEO of electric carmaker Tesla , said the Big Falcon Rocket could conduct its first orbital flights in two to three years as part of his grand plan to shuttle passengers to the moon and eventually fly humans and cargo to Mars.

According to Virgin, SpaceShipTwo is hauled to an altitude of about 45,000 feet (13.7 kms) by the WhiteKnightTwo carrier airplane and released. The spaceship then fires its rocket motor to catapult it to at least 50 miles (80.47 km) above Earth, high enough for passengers to experience weightlessness and see the curvature of the planet.

Bezos’ New Shepard has already flown to that altitude – an internationally recognized boundary between Earth’s atmosphere and outer space known as the Karman line – though the Blue Origin trip did not carry humans.

Virgin’s Thursday launch likely will not go as high as the Karman line. Virgin’s pilots are aiming to soar 50 miles into the sky – the U.S. military and NASA’s definition of the edge of space and high enough to earn commercial astronaut wings by the U.S. Federal Aviation Administration.

Thursday’s test flight carried two pilots, four NASA research payloads, and a mannequin named Annie as a stand-in passenger.

(Reporting by Eric M. Johnson in Mojave, California Additional reporting by Irene Klotz in Cape Canaveral, Florida Editing by Leslie Adler and Nick Zieminski)

Image from http://www.virgingalactic.com