Amazon Web Services (AWS) has won the bidding war over the right to build $600M CIA private cloud which is to be used by its entire community. It beat the other bidder, IBM, which was forced to take the matter to Government Accountability office.
IBM appealed CIA’s decision to award the multi-million tender business to Amazon. This is why they took the matter to GAO which then ordered the spy agency to reopen the bids. But IBM were having none of it.
They also filed a complaint of their own, arguing that the CIA had done nothing wrong in awarding the tender to them. This was rather obvious as they could not have appealed otherwise. According to them, the matter was done and dusted and should have been left at that. AWS felt hard done by the GAO, which it thought had taken sides with IBM’s IBM +0.05%.
AWS were not only miffed by GAO’s directive because of financial reasons, but more importantly because the government tender would have given them quite a lot of credibility.
Given that Amazon sees itself as among the most innovative and cheapest mass cloud provider, these claims coming from another competitor certainly didn’t go too well with the Amazon headquarters.
Countering the claims
It went ahead and filed counter claims at US Court of Federal Claims. In their suit, they claimed that there was nothing wrong when CIA awarded them the tender in the first time, and their opinion was that this tender ought to be left to so that it runs to its conclusion.
What buffaloed many in this saga is that AWS were not the lowest bidder, who in many cases wins the tender. In fact, their bid was considerably higher compared to what IBM was charging. But looking at text of the complaint, it is clear that CIA was very thorough in its evaluation. In that evaluation, AWS emerged the better scorer in many areas compared to IBM.
The text of claim further shows that CIA classed AWS as “low risk” while at the same ranking IBM as high risk based on the proposal.
But after Judge Thomas Wheeler adjudicated on AWS’s favor, it heralded a second time in which AWS has triumphed over IBM. Of course IBM did not welcome the news, vowing that they will appeal the decision. Through a statement, it was clear that IBM was not amused.
They said that they felt let down by the ruling from US Federal of Federal Claims, which had reversed the recommendation by the GAO to begin the competition afresh and also correct mistakes that were in the bidding process. They further said that they intended to appeal the ruling.
Through the statement, they added that the ruling failed to mirror the current times, given that IBM was obviously superior to AWS in several ways. One of the areas they pointed out is that they are a more cost effective option, and that they had been the chief government supplier for operations that were considered mission-critical.
On the other hand, and quite expectedly, Amazon camp was visibly in high spirits. They had this to say to VentureBeat.
_“We are happy with the court’s ruling and hope to resume our duties on this very important contract with our customer_”
This inevitably means that the end to this sorry saga is nowhere in sight. But whether they will win it or be third time unlucky is something that we will have to wait and see. But if IBM keeps pushing hard for this case, they will only reinforce the notion that they are bad losers. Given the thoroughness that CIA put in evaluating the two companies, it is safe to assume that AWS deservedly got the tender.
Amazon, being one of the biggest internet companies, has all the wherewithal to run this mega contract. Unless IBM would be trying to prove otherwise, I do not see them succeeding even if they appeal.
Obviously, this contract heralds a pace shift for the Amazon Web Services. It should be remembered that in the past, it has been very critical of when it came to private cloud solution.
However, given the large sum of money that was involved, it could be forgiven for a little backpedaling. Given that Amazon is one of the largest online companies with huge troves of information, it raises suspicion why CIA has chosen it.
May be they want. Who knows? Only time will tell if there is more to this Amazon/CIA contact.
One point of view is that IBM (previously bought by Chinese company, Lenovo) has many of US officials not liking state intelligence in hands of the foreign company. This is similar to what MacquaireTelecom recently warned public about (see video). Basically, US, utilyzing PatriotAct law, has jurisdiction over data stored on US based companies servers even though they might not be located on US soil. One of those examples is Amazon Australia which Ninefold pointed at.