Amazon’s Wickr acquisition is a push to win military contracts

Amazon recently bought encrypted messaging app Wickr, and not because it’s eager to absorb the app’s user base of journalists, activists, and drug dealers. Amazon sees an opportunity to make inroads with Wickr’s other key constituency: government agencies and the military.

In a June 25 blog post announcing the deal, Amazon Web Services (AWS) vice president Stephen Schmidt noted the app’s potential for generating government and military contracts. “Today, public sector customers use Wickr for a diverse range of missions, from securely communicating with office-based employees to providing service members at the tactical edge with encrypted communications,” he wrote.

What Wickr does

In addition to the free version of Wickr, which is open to the general public, the app also has three subscription businesses. Wickr Pro and Wickr Enterprise are geared toward privacy-conscious corporations, while Wickr RAM is designed for the military and law enforcement agencies. Last year, Wickr RAM won a two-year, $35 million contract to provide encrypted messaging for the Army, Navy, and Air Force, and received at least $700,000 as part of a contract with US Customs and Border Patrol. Wickr’s website also lists military contractors like ARMA Global and General Dynamics Information Technology among its partners and customers.

Schmidt noted in his blog post that government agencies and the military are navigating the same confusing post-pandemic shift to hybrid work as businesses everywhere. “[E]nterprises and government agencies have a growing desire to protect their communications across many remote locations,” he wrote. That creates an opportunity for Amazon to cash in by expanding Wickr’s existing business relationship with public agencies.

AWS and cloud computing for the US government

The Wickr acquisition aligns with Amazon’s longer-term push to position its cloud computing arm, AWS, as a heavyweight government contractor. In 2013, AWS won a 10-year, $600 million contract to become the CIA’s cloud computing provider, and in 2018 documents revealed that AWS sold cloud services that underpin US Immigration and Customs Enforcement’s immigrant surveillance system.

Now, Amazon is planning to open a second headquarters in Arlington, Virginia—spitting distance from the Pentagon—as it pursues a 10-year, $10 billion contract to build the US military’s cloud computing infrastructure, part of a project dubbed JEDI. After the Pentagon awarded the JEDI contract to Microsoft in 2019, Amazon sued in a last-ditch effort to claw back the deal. The ongoing legal battle has been so onerous and time-consuming that the Department of Defense is considering canceling the contract and breaking the project up into several smaller pieces, which would give Amazon another shot at grabbing a chunk of the military’s cloud budget.

America’s “cloud first” policy

Amazon has much to gain from positioning itself as Uncle Sam’s default tech contractor. The US government is still in the midst of a sprawling, expensive effort to shift its IT network onto the cloud as part of a “cloud first” policy, which was announced by the Obama White House in 2010 and made law under the 2014 Federal Information Technology Acquisition Reform Act (which passed with heavy lobbying support from Amazon, among other tech giants). The company that can control these cloud contracts will secure a large, steady source of revenue for years to come.