When the Pentagon killed the JEDI cloud program yesterday, it was the end of a long and bitter road for a project that never seemed to have a chance. The question is why it didn’t work out in the end, and ultimately I think you can blame the DoD’s stubborn adherence to a single vendor requirement, a condition that never made sense to anyone, even the vendor that ostensibly won the deal.

In March 2018, the Pentagon announced a mega $10 billion, decade-long cloud contract to build the next generation of cloud infrastructure for the Department of Defense. It was dubbed JEDI, which aside from the Star Wars reference, was short for Joint Enterprise Defense Infrastructure.

The idea was a 10-year contract with a single vendor that started with an initial two-year option. If all was going well, a five-year option would kick in and finally a three-year option would close things out with earnings of $1 billion a year.

While the total value of the contract had it been completed was quite large, a billion a year for companies the size of Amazon, Oracle or Microsoft is not a ton of money in the scheme of things. It was more about the prestige of winning such a high-profile contract and what it would mean for sales bragging rights. After all, if you passed muster with the DoD, you could probably handle just about anyone’s sensitive data, right?

Regardless, the idea of a single-vendor contract went against conventional wisdom that the cloud gives you the option of working with the best-in-class vendors. Microsoft, the eventual winner of the ill-fated deal acknowledged that the single vendor approach was flawed in an interview in April 2018:

Leigh Madden, who heads up Microsoft’s defense effort, says he believes Microsoft can win such a contract, but it isn’t necessarily the best approach for the DoD. “If the DoD goes with a single award path, we are in it to win, but having said that, it’s counter to what we are seeing across the globe where 80% of customers are adopting a multicloud solution,” Madden told TechCrunch.

Perhaps it was doomed from the start because of that. Yet even before the requirements were fully known there were complaints that it would favor Amazon, the market share leader in the cloud infrastructure market. Oracle was particularly vocal, taking its complaints directly to the former president before the RFP was even published. It would later file a complaint with the Government Accountability Office and file a couple of lawsuits alleging that the entire process was unfair and designed to favor Amazon. It lost every time — and of course, Amazon wasn’t ultimately the winner.

While there was a lot of drama along the way, in April 2019 the Pentagon named two finalists, and it was probably not too surprising that they were the two cloud infrastructure market leaders: Microsoft and Amazon. Game on.

The former president interjected himself directly in the process in August that year, when he ordered the Defense Secretary to review the matter over concerns that the process favored Amazon, a complaint which to that point had been refuted several times over by the DoD, the Government Accountability Office and the courts. To further complicate matters, a book by former defense secretary Jim Mattis claimed the president told him to “screw Amazon out of the $10 billion contract.” His goal appeared to be to get back at Bezos, who also owns the Washington Post newspaper.

In spite of all these claims that the process favored Amazon, when the winner was finally announced in October 2019, late on a Friday afternoon no less, the winner was not in fact Amazon. Instead, Microsoft won the deal, or at least it seemed that way. It wouldn’t be long before Amazon would dispute the decision in court.

By the time AWS re:Invent hit a couple of months after the announcement, former AWS CEO Andy Jassy was already pushing the idea that the president had unduly influenced the process.

“I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal,” Jassy said at that time.

Then came the litigation. In November the company indicated it would be challenging the decision to choose Microsoft charging that it was was driven by politics and not technical merit. In January 2020, Amazon filed a request with the court that the project should stop until the legal challenges were settled. In February, a federal judge agreed with Amazon and stopped the project. It would never restart.

In April the DoD completed its own internal investigation of the contract procurement process and found no wrongdoing. As I wrote at the time:

While controversy has dogged the $10-billion, decade-long JEDI contract since its earliest days, a report by the DoD’s inspector general’s office concluded today that, while there were some funky bits and potential conflicts, overall the contract procurement process was fair and legal and the president did not unduly influence the process in spite of public comments.

Last September the DoD completed a review of the selection process and it once again concluded that Microsoft was the winner, but it didn’t really matter as the litigation was still in motion and the project remained stalled.

The legal wrangling continued into this year, and yesterday the Pentagon finally pulled the plug on the project once and for all, saying it was time to move on as times have changed since 2018 when it announced its vision for JEDI.

The DoD finally came to the conclusion that a single-vendor approach wasn’t the best way to go, and not because it could never get the project off the ground, but because it makes more sense from a technology and business perspective to work with multiple vendors and not get locked into any particular one.

“JEDI was developed at a time when the Department’s needs were different and both the CSPs’ (cloud service providers) technology and our cloud conversancy was less mature. In light of new initiatives like JADC2 (the Pentagon’s initiative to build a network of connected sensors) and AI and Data Acceleration (ADA), the evolution of the cloud ecosystem within DoD, and changes in user requirements to leverage multiple cloud environments to execute mission, our landscape has advanced and a new way ahead is warranted to achieve dominance in both traditional and nontraditional warfighting domains,” said John Sherman, acting DoD chief information officer in a statement.

In other words, the DoD would benefit more from adopting a multicloud, multivendor approach like pretty much the rest of the world. That said, the department also indicated it would limit the vendor selection to Microsoft and Amazon.

“The Department intends to seek proposals from a limited number of sources, namely the Microsoft Corporation (Microsoft) and Amazon Web Services (AWS), as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements,” the department said in a statement.

That’s not going to sit well with Google, Oracle or IBM, but the department further indicated it would continue to monitor the market to see if other CSPs had the chops to handle their requirements in the future.

In the end, the single vendor requirement contributed greatly to an overly competitive and politically charged atmosphere that resulted in the project never coming to fruition. Now the DoD has to play technology catch-up, having lost three years to the histrionics of the entire JEDI procurement process and that could be the most lamentable part of this long, sordid technology tale.

After several years of fighting and jockeying for position by the biggest cloud infrastructure companies in the world, the Pentagon finally pulled the plug on the controversial winner-take-all, $10 billion JEDI contract today. In the end, nobody won.

“With the shifting technology environment, it has become clear that the JEDI cloud contract, which has long been delayed, no longer meets the requirements to fill the DoD’s capability gaps,” a Pentagon spokesperson stated.

The contract procurement process began in 2018 with a call for RFPs for a $10 billion, decade-long contract to handle the cloud infrastructure strategy for The Pentagon. Pentagon spokesperson Heather Babb told TechCrunch why they were going with the. single-winner approach: “Single award is advantageous because, among other things, it improves security, improves data accessibility and simplifies the Department’s ability to adopt and use cloud services,” she said at the time.

From the start though, companies objected to the single-winner approach, believing that the Pentagon would be better served with a multi-vendor approach. Some companies, particularly Oracle believed the procurement process was designed to favor Amazon.

In the end it came down to a pair of finalists — Amazon and Microsoft — and in the end Microsoft won. But Amazon believed that it had superior technology and only lost the deal because of direct interference by the previous president who had open disdain for then-CEO Jeff Bezos (who is also the owner of the Washington Post newspaper).

Amazon decided to fight the decision in court, and after months of delay, the Pentagon made the decision that it was time to move on. In a blog post, Microsoft took a swipe at Amazon for precipitating the delay.

“The 20 months since DoD selected Microsoft as its JEDI partner highlights issues that warrant the attention of policymakers: When one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform. Amazon filed its protest in November 2019 and its case was expected to take at least another year to litigate and yield a decision, with potential appeals afterward,” Microsoft wrote in its blog post about the end of the deal.

But in a statement of its own, Amazon reiterated its belief that the process was not fairly executed. “We understand and agree with the DoD’s decision. Unfortunately, the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement. Our commitment to supporting our nation’s military and ensuring that our warfighters and defense partners have access to the best technology at the best price is stronger than ever. We look forward to continuing to support the DoD’s modernization efforts and building solutions that help accomplish their critical missions,” a company spokesperson said.

It seems like a fitting end to a project that I felt was doomed from the beginning. From the moment the Pentagon announced this contract with the cutesy twist on the Star Wars name, the procurement process has taken more twists and turns than a TV soap.

In the beginning, there was a lot of sound and fury and it led to a lot of nothing. We move onto whatever cloud procurement process happens next.

Whether you are part of the accounting department, or just any employee at an organization, managing expenses can be a time-consuming and error-filled, yet also quite mundane, part of your job. Today, a startup called Pleo — which has built a platform that can help some of that work more smoothly, by way of a vertically integrated system that includes payment cards, expense management software, and integrated reimbursement and pay-out services — is announcing a big round of growth funding to expand its business after seeing strong traction.

The Copenhagen-based startup has raised $150 million — money that it will be using to continue building out more features for its users, and for business development. The round, which sets a record for being the largest Series C for a Danish startup, values Pleo at $1.7 billion, the startup has confirmed.

There are around 17,000 small and medium businesses now using Pleo, with companies at the medium end of that numbering around 1,000 employees. Now with Pleo moving into slightly larger customers (up to 5,000 employees, CEO Jeppe Rindom, said), the startup has set an ambitious target of reaching 1 million users by 2025, a very lucrative goal, considering that expenses management is estimated to be a $80 billion market in Europe (with the global opportunity, of course, even bigger).

It will also be using the funds simply to expand its business. Pleo has around 330 employees today spread across London, Stockholm, Berlin and Madrid, as well as in Copenhagen, and it will be using some of the investment to grow that team and its reach.

Bain Capital Ventures and Thrive Capital co-led this round, a Series C. Previous backers, including Creandum, Kinnevik, Founders, Stripes and Seedcamp, also participated. Stripes led the startup’s Series B in 2019. It looks like this round was oversubscribed: the original intention had been to raise just $100 million.

Like other business processes, managing expenses and handling company spending has come a long way in the last many years.

Gone are the days where expenses inevitably involved collecting paper receipts and inputting them manually into a system in order to be reimbursed; now, expense management software links up with company-issued cards and taps into a range of automation tools to cut out some of the steps in the process, integrating with a company’s internal accounting policies to shuffle the process along a little less painfully. And there are a number of companies in this space, from older players like SAP’s Concur through to startups on the cusp of going public like Expensify as well as younger entrants bringing new technology into the process.

But, there is still lots more room for improvement. Rindom, Pleo’s CEO who co-founded the company with CTO Niccolo Perra, said the pair came up with the idea for Pleo on the back of years of working in fintech — both were early employees at the B2B supply chain startup Tradeshift — and seeing first-hand how short-changed, so to speak, small and medium businesses in particular were when it came to tools to handle their expenses.

Pleo’s approach has been to build, from the ground up, a system for those smaller businesses that integrate all the different stages of how an employee might spend money on behalf of the company.

Pleo starts with physical and virtual payment cards (which can be used in, for example, Apple Wallet) that are issued by Pleo (in partnership with MasterCard) to buy goods and services, which in turn are automatically itemized according to a company’s internal accounting systems, with the ability to work with e-receipts, but also let people use their phones to snap pictures of receipts when they are only on paper, if required. This is pretty much table stakes for expense software these days, but Pleo’s platform is going a couple of steps beyond that.

Users (or employers) can integrate a users’ own banking details to make it easier to get reimbursed when they have had to pay for something out of their own pocket; or conversely to pay for something that shouldn’t have been charged on the card. And if there are invoices to be paid at a later date from the time of purchase, these too can be actioned and set up within Pleo rather than having to liaise separately with an accounts payable department to get those settled. Higher priced tiers (beyond the basic service for up to five users) also lets a company set spending limits for individual users. Pricing is based on number of users, per month.

Pleo also has built fraud protection services into the platform to detect, for example, cases when a card number might have been compromised and is being used for non-work purposes.

What’s notable is that the startup has built all of the tech that it uses, including the payments feature, from the ground up, to have full control over the features and specifically to be able to add more of them more flexibly over time.

“In the beginning we ran with a partner in services like payments, but it didn’t allow us to move fast enough,” Rindom said in an interview. “So we decided to take all of that in-house.”

It seems like this opens the door to a lot of possibilities for how Pleo might evolve in the years ahead now that it’s focused on hyper-growth. However, Rindom added that whatever the next steps might be, they will remain focused on continuing to solve the expenses problem.

“When it comes to our infrastructure we use it only for ourselves,” he said. “We have no plans of selling [for example, payments] as a service, even if we do have a lot of other ideas for broadening our offerings.” Indeed, the ability to pay invoices was launched only in April of this year. “We come up with things all the time, but will launch only those relevant to customers.” For now, at least.

That focus and perhaps even more than that the execution and customer traction are what have brought investors around to backing a fintech out of Copenhagen.

“The future of work empowers employees with the tools they need to be effective, productive, and successful,” said Keri Gohman, a partner at Bain Capital Ventures, in a statement. “Pleo understands this critical shift for modern companies toward employee centricity—providing workers with a fun-to-use spend management app that automatically tracks their corporate spending and generates expense reports, paired with the powerful tools businesses need to create full visibility and management of every penny spent.”

Bain has been a pretty active investor in European fintech, also backing GoCardless in its recent round. “BCV invests in founders who aren’t afraid to tackle big problems, and Jeppe and Nicco saw a big challenge that employers faced—tracking all corporate spending and reconciling expenses back to the general ledger—and solved it with elegant technology that both employers and employees love,” added Merritt Hummer, a partner at Bain Capital Ventures.

Thrive is also a notable backer here, and it will be interesting to see how and if Pleo links up with others in the VC’s portfolio, which include companies like Plaid, Gong and Trade Republic.

“Pleo has already transformed the way that over 17,000 companies think about managing their expenses, saving them time and lowering costs while increasing transparency,” noted Kareem Zaki, a general partner at Thrive Capital, in a statement. “We are excited to partner closely with the Pleo team to help drive their next phase of growth.”

In a surprise announcement today, IBM announced that Jim Whitehurst, who came over in the Red Hat deal, would be stepping down as company president just 14 months after taking over in that role.

IBM didn’t give a lot of details as to why he was stepping away, but acknowledged his key role in helping bring the 2018 $34 billion Red Hat deal to fruition and helping bring the two companies together after the deal closed. “Jim has been instrumental in articulating IBM’s strategy, but also, in ensuring that IBM and Red Hat work well together and that our technology platforms and innovations provide more value to our clients,” the company stated.

He will stay on as a senior adviser to Krishna, but it begs the question why he is leaving after such a short time in the role, and what he plans to do next. Oftentimes after a deal of this magnitude closes, there is an agreement as to how long key executives will stay. It could be simply that the period has expired and Whitehurst wants to move on, but some saw him as the heir apparent to Krishna and the move comes as a surprise when looked at in that context.

“I am surprised because I always thought Jim would be next in line as IBM CEO. I also liked the pairing between a lifer IBMer and an outsider,” Patrick Moorhead, founder and principal analyst at Moor Insight & Strategies told TechCrunch.

Regardless, it leaves a big hole in Krishna’s leadership team as he works to transform the company into one that is primarily focused on hybrid cloud. Whitehurst was undoubtedly in a position to help drive that change through his depth of industry knowledge and his credibility with the open source community from his time at Red Hat. He is not someone who would be easily replaced and the announcement didn’t mention anyone filling his role.

When IBM bought Red Hat in 2018 for $34 billion, it led to a cascading set of changes at both companies. First Ginni Rometty stepped down as CEO at IBM and Arvind Krishna took over. At the same time, Jim Whitehurst, who had been Red Hat CEO moved to IBM as president and long-time employee Paul Cormier moved into his role.

At the same time, the company also announced some other changes including that long-time IBM executive Bridget van Kralingen announced she too was stepping away, leaving her role as senior vice president of global markets. Rob Thomas, who had been senior vice president of IBM cloud and data platform, will step in to replace Van Kraligen.