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Amazon, Google reportedly oust Microsoft, Oracle in massive Israel cloud tender

Amazon and Google have ousted Microsoft and Oracle to become the two leading contenders to win a chance to build a massive cloud-based regional data center in Israel that is being pitched to the tech industry’s biggest international companies, according to Hebrew press reports.

The tech giants are competing in a tender for Israel’s flagship multi-billion-shekel project that would provide cloud services to entire public sector and military. The government is expected to announce the winners in about two weeks, TheMarker financial website said.

One or both of the two finalists could be chosen to provide the services, TheMarker said.

A spokesperson for the Finance Ministry told The Times of Israel that the names of the winners will be published when the tender process is complete. She could not say when that would be.

The cloud project, called the Nimbus, is one of Israel’s biggest information technology projects, and it will enable government ministries and other public entities to transfer servers and services into the cloud that will be set up by the winning firm.

The tender for setting up the data center, which is one of four tenders to be issued by the Nimbus project, was open only to international tech giants. It requires the winner to set up a local data center with servers to ensure that the information they contain remains within Israel.

Microsoft and Oracle are both leaders in providing cloud services to governments globally, and both have started setting up data centers in Israel. Furthermore, Microsoft reportedly told Prime Minister Benjamin Netanyahu earlier this month that it plans to invest over $1 billion in Israel through setting up the new data center and expanding its R&D activities locally.

The Calcalist financial website said that Microsoft’s failure to win the tender is because of an expected delay in the launch of its data center. This was scheduled to open in 2021, but that date has now been pushed back to 2022.

Oracle’s ousting was said due to technical parameters in its submission.

Oracle said in February it was setting up a new data center in Jerusalem to function as a regional cloud provider to serve Israeli clients.

The two tech firms may not wish to step aside, though, and may put pressure on government ministries to change the outcome of the tender or even resort to legal proceedings, reports speculated.

The Nimbus project is divided into four parts with four separate tenders: to provide cloud services to the government on a public platform; to help set out a government strategy to move operations to the cloud; to provide technical help in implementing the move; and an as-yet unpublished one to provide optimization services for use of the cloud, TheMarker said.

Source: Shoshana Solomon – TOI