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Microsoft Expects ‘Halo Effect’ From Winning Pentagon JEDI Contract

Fresh off of winning the Pentagon’s $10 billion JEDI contract, Microsoft CEO Satya Nadella said the company is expecting a “halo effect,” according to Yahoo Finance’s Brian Sozzi. “Halo effe...
Microsoft Expects ‘Halo Effect’ From Winning Pentagon JEDI Contract
Written by Matt Milano

Fresh off of winning the Pentagon’s $10 billion JEDI contract, Microsoft CEO Satya Nadella said the company is expecting a “halo effect,” according to Yahoo Finance’s Brian Sozzi.

“Halo effect” was a term used frequently in regard to Apple products, starting with the iPod. If customers liked the iPod enough, and were impressed with the Apple experience, it might entice them to purchase a Mac. That halo effect has since expanded to iPhones, iPads and Watches. Microsoft is now in a position to generate a halo effect of its own in the cloud market.

While Windows may be the dominant player in the desktop market, it’s a distant second in the cloud arena, with 15.5% compared with AWS’ 47.8% market share. A significant deal—not to mention Microsoft’s recent Impact Level 6 Pentagon security certification—could entice other government agencies to invest in the software giant for their cloud needs, creating an ever-expanding halo effect. Nadella believes the JEDI contract could do just that, but also emphasized the need to stay grounded and not become overly confident.

“Any big deal has a halo effect,” Nadella told Sozzi in an exclusive interview. “But to me, the most important thing is not to take any deal you won as some guarantee for future success but to stay humble, stay grounded on what we need to continue to do, which is be obsessed about customer needs. That’s what got us here.”

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