Microsoft won the battle Pentagon, but it didn’t win the war


October 29, 2019

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The Hustle Daily Email.

Happy Tuesday, people. It’s shaping up to be an interesting week… The Pentagon awarded a $10B contract to Microsoft instead of Amazon in its latest JEDI mind trick (but I’d bet my bottom Prime purchase that Bezos will be back), and a soapy situation at Walmart is starting to get slick. Stay tuned.

This JEDI fight might be done, but Big Tech-military contracts are just getting started

A few days ago, the US Department of Defense awarded Microsoft a 10-year, $10B cloud services contract, finally crowning an (unexpected) victor in the yearlong contest.

It’s been a long road to the 1 true JEDI

At first, the Big ’Soft, IBM, Oracle, Google, and Amazon were all in the running for the $10B contract, which is not only the biggest internet technology contract in military history but also a foot in the door for the billions of dollars in federal spending on cloud computing expected over the next few years.

Despite objections from critics who called for the contract to be split among multiple contractors, the DOD decided the JEDI contract would remain a winner-takes-all award. 

And after Google dropped out for ethical reasons (the company has committed to not using AI to develop weapons), Microsoft and Amazon became the only contract competitors in April when the Pentagon declared that IBM and Oracle weren’t technically up to snuff.

Until recently, the force was strongest with Amazon

Amazon was expected to win the contract thanks to its dominant position in the cloud computing industry: ’Zon controls a 48% market share, compared to Microsoft’s 15.5% market share — and, unlike Microsoft, it already has the military’s highest level of data management certification.

But the skies darkened for Amazon’s cloud when President Trump — a widely known critic of Amazon chief Jeff Bezos — joined the chorus of voices complaining that Amazon’s aggressive pursuit of the JEDI contract had been anti-competitive.

Now it’s Amazon’s turn to strike back

Both IBM and Oracle have already lodged formal complaints about the JEDI bidding process, arguing that parameters of the contract stacked the deck in Amazon’s favor.

But now that Amazon has lost, Bezos’ Big Biz is considering its own appeal of the decision based on President Trump’s interference.

Either way, both Microsoft and Amazon are poised to profit from their relationships with the US military in the future: Amazon makes $2B in annual revenue from its contracts with the federal government, and Microsoft last year signed a deal to provide cloud computing to 17 government agencies.

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Wall Street investors take a big gulp of water resources

As aquifers dry out — thanks, climate change — investors are betting water rights will be more than a liquid asset. 

In Washington state, a Wall Street-backed firm called Crown Columbia Water Resources is looking to change the water rights game… but some worry this business model will leave locals high and dry.

Fight for your right to water

Water rights are a landowner’s claim to water access from adjacent rivers, streams, or groundwater sources. 

Since 2017, Crown Columbia has been snapping up smaller farms — not for the ag activity but for the water rights that come with them. So far the firm has dropped at least $4.7m in several rural counties. 

Crown Columbia says its plan is to streamline the existing water redistribution system, making it easier to sell water to everyone from parched metro areas to major farming operations. 

But plenty of people aren’t convinced

Some farmers and ranchers are worried that the profit motive inherent in selling water will threaten their livelihoods. This could, in turn, affect the rest of the country, as Washington is known for high-value produce like apples, cherries, and wine grapes.

Others take umbrage with private interests taking control of what has historically been a public resource. 

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Inside the business of the gig economy’s nightly scooter scavenger hunts

People in cargo vans have been burning rubber every night, picking up dead micro-mobility vehicles (scooters, e-bikes, etc.) and charging them so they’re ready to rip the next day. Lime calls these freelance contractors “juicers” — and to that we say, well-played, Lime. Well-played.  

Some juicers have reported earning up to $50 an hour. But, as The New York Times illustrates, the system has flaws — for both the contractors trying to make ends meet and the companies deploying them.

Get juiced 

Lime pays its juicers $3 to $10 per each scooter collected, rejuiced, and returned to the wild. While that seems like chump change in isolation, some scooter scavengers can make up to $160 a day — but it’s not always easy.

With over 37k scooters and e-bikes in Los Angeles alone, drivers are often met with critical-thinking obstacles (a dead scooter’s behind a locked gate, what you do?), hoarders (cheaters who collect scooters before they’re posted in the app), and repairs (AKA an extra trip to a “fix-it location”) that eat into their livelihood. Because, especially in this case, time is money. 

It’s also tricky for companies to employ juicers. Recent research found that companies were generating $2.43 per mile in revenue in 2019 but spending $2.55 per mile to keep the scooters running.

Then there’s the environmental contradiction…

A big reason for this whole scooter assault is to cut down on carbon emissions. But a recent study found that the average juicer drives between half a mile and 2.5 miles per scooter — accounting for 40% of a scoot’s total carbon footprint.

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Think you’re going green by streaming everything? Think again

Renting a movie used to involve a car. Now the world’s content fever can be cured from home — no pollutant-pushing car ride necessary. 

In other words, by Netflix and chill-ing, we’ve all become our own versions of Greta Thunberg… right? WRONG. In fact, an environmental impact report from The Shift Project says we need to chill out on Netflix altogether (or at least the quality in which we view it). 

Yup, even stream-venience hurts the ozone. And, as the video-on-demand  landscape continues to grow, and video file sizes keep getting bigger, it’s expected to get worse. 

*Throws up hands in defeat*

It’s a hard truth to tell. But online video produces 300m tons of CO2 per year, AKA 1% of global emissions (which is equivalent to those emitted by the entire country of Spain), and video-on-demand platforms like Netflix, Amazon Prime, and Hulu make up 34% of the online video content pie.

At the same time, the technology used to watch online videos is getting larger, with the average TV screen size expected to grow to more than 50 inches by 2021 — a whole 28 inches since we had to wait to watch Friends once a week back in 1997.

So what now? Light a candle and relearn to read?

The report encourages “digital sobriety,” but that doesn’t mean to quit cold turkey. It just means to be friggin’ mindful, you know?

The Shift Project suggests streaming in lower-grade visual formats over Wi-Fi — Wait, no 4K? OK, you be mindful, I got Ross and Rachel reruns to watch. 

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What Else…

💧 Walmart warns of a soap shortage… but is it just blowing bubbles? Despite fully stocked shelves of dish soap, some Walmart locations posted signs warning of a “national supply shortage.” Procter & Gamble (which owns almost 60% of the hand-dishwashing soap market) admits it underproduced its suds. But rival retailers like Target insist inventory levels are squeaky clean — and now P&G is peeved that Walmart dished out too many dirty details.

🍗 The chicken wars are gettin’ spicy. Popeyes is reviving its virally popular chicken sandwich on a Sunday — the day that its biggest rival Chick-fil-A is famously closed. Thanks to its new sandwich, Popeyes is, well, on a roll: Last quarter was one of the chain’s best in 2 decades. The only question is: Was it all part of the plan… or are they just wing-ing it?

🌽 Do you know where your broccoli’s been? A new report highlights the complexity of America’s food supply chain with an amazing map that highlights some of the 9.5m links between counties that transfer food in and out. So next time your commute seems long, remember: Our corn sometimes stops in 3 states just to travel to our dinner plates.

🚚 For same-day delivery, you’ll have to live with terrible traffic. A deep dive from The New York Times shows that internet deliveries (and the race toward same-day delivery) are clogging streets in New York. The number of daily deliveries in the Big Apple tripled between 2009 and 2017 — one of the reasons (along with ride-sharing) that average car speeds in parts of Manhattan have slowed to about 7 mph.

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