This year, it has been fascinating to watch the jockeying between two tech titans, Amazon and IBM, as each seeks to become a main service provider as the Central Intelligence Agency moves some of its IT operations to the cloud.
Amazon Web Services (AWS) was the early winner in that race, when it was awarded the initial contract. But an appeal by IBM stalled the effort.
But one thing is for certain. Even if Amazon ultimately loses this contract, the very fact that the company was an early winner greatly boosts its standing in the realm of government IT contractors. When one of the most security-conscious of all federal agencies declares that Amazon is capable of delivering the sort of large-scale secure computing environment that an intelligence agency needs, it gives the company some instant inside-the-beltway street cred.
Here's the narrative so far
The CIA is working toward a substantial shift in its computing strategy, moving many of its operations to private cloud providers. This decision is driven by the agency's need to treat big data as an intelligence tool, and to access scalable computing power capable of supporting its massive data analytics needs.
The path to cloud has been rocky. Back in mid 2012, Both AT&T and Microsoft protested the CIA's original request-for-proposal details -- according to a GAO report that reviewed the procurement. At that time the CIA made corrections to its bid solicitation which addressed those issues, and the procurement continued.
In February, the CIA reportedly awarded a private cloud contract to AWS. The contract potentially could cover up to 10 years, with a value of up to $600 million if all options are selected. When the award went to AWS. IBM quickly filed a protest, and also filed a series of supplemental statements. It has been difficult to get any of the participants to go on record, but the protest papers and various GAO documents have basically outline what is happening. This has made it possible to track the progress of the protest.
In June of this year, the GAO published a report examining the issue. It ruled that it agreed with some of IBM's complaints, including the CIA's failure to evaluate pricing for both vendors fairly. In theory, IBM submitted a proposal that was up to a third cheaper than what AWS offered. However, it's also fair to say that the bid had some level of uncertainty over other associated services costs which could muddy the waters when it came to final price points.
Since the price differential might not be a deciding factor, the CIA's decision mostly came down to which company it felt had more experience running a hosted environment capable of rapidly scaling when processing power is needed for specific projects. One key reason why cloud awards tend to attract protests is that objective definitions of cloud as a technology solution are still evolving.
The chart below, taken from the June GAO report, shows the major criteria used by the CIA to judge AWS as the more appropriate solution for their needs. A recomplete would allow the bidders to address perceived shortcomings in specific areas.
In IBM's favor: The company has long history of delivering successful solutions to government, including highly secure environments for the military and intelligence communities.
In Amazon's favor: It has shown that it is willing to augment its current business models in order to meet the special needs of the government. The CIA contract, if it is eventually awarded to AWS, would be the first time the company would manage a private facility away from its main IT facilities. It's worth noting that AWS also went through the GSA's FedRamp certification process as it attempts to reach more potential federal customers. And, even though Amazon was not named to the recent cloud contract announced by the Department of the Interior, the company is still a part of the mix. AWS partners with three of the 10 approved vendors on that list - Aquilent, Smartronix and Lockheed Martin.
Clearly, both AWS and IBM are capable of delivering a secure cloud environment for the CIA. But as the newer player in the government cloud marketplace, AWS has more at stake for a big win like this. Even if their win ultimately is overturned, Amazon has benefited greatly from this full process, and now is being taken as an even more serious contender in the government cloud services market.