A storm is gathering on the cloud business

Hello,

This is Alexei Oreskovic, Business Insider’s Global Tech Editor and West Coast Bureau Chief. Starting today I’ll be sending a new weekly newsletter – “Trending” – dedicated to Business Insider Prime’s tech coverage.

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This week: The cloud is now in the center of the storm

The booming cloud market is suddenly getting a lot of attention from new places, not all of it welcome.

The Pentagon’s decision to examine the $10 billion JEDI mega-contract, which was all but a done deal for Amazon,was a big wake-up call in Seattle. Sure, the move may be linked in part to Trump’s personal grudge against Amazon CEO and Washington Post owner Jeff Bezos, but it’s hardly the only scrutiny Amazon’s cloud business is getting. The US Federal Reserve reportedly paid a visit to an Amazon datacenter recently to better understand the processes and safeguards in place; And let’s not forget that the big Capital One hack occurred on the AWS platform, even if the mistake was made by Capital One. The price of success is scrutiny, and Amazon is going to have to get used to it.

Meanwhile, the top cloud players are scrambling to bulk up and pair up. As Julie Bort reports in her story on the recent Google VMware partnership, the intriguing backstory of the deal points to the frenzied level of competition and maneuvering going on. And it shows the power of having a shrewd strategist like Thomas Kurian, the Oracle exec that Google poached to lead its Cloud business, on your side.

The wave of big-ticket M&A in the enterprise tech sector is also a direct result of the shifting balance of power triggered by the cloud business, as Megan Hernbroth reports. And Ben Pimentel spoke to IBM’s cloud boss about his plans, following the $34 billion Red Hat acquisition.

Check out the stories:

How VMware became a secret superpower in the cloud wars and why Amazon Web Services should not be happy but Google and Microsoft are thrilled

Pat Gelsinger   Andy Jassy

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Amazon re:Invent/Business Insider

New forces in enterprise tech are triggering a wave of mega-deals and Salesforce’s $15 billion Tableau acquisition was just the start

salesforce tower san francisco marc benioff 5328

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Melia Robinson/Business Insider

IBM’s cloud boss reveals the game plan for its $34 billion Red Hat acquisition, and says it’ll give it ‘massive reach’ in a $1.2 trillion cloud market

Arvind Krishna, IBM's senior vice president for cloud

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IBM

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– Alexei