Amazon is one step closer to building private cloud services for the Central Intelligence Agency, after a federal judge rejected a call from IBM to re-open bidding on the agency’s $600 million contract.
On Monday, as reported by Bloomberg and others, U.S. Court of Federal Claims Judge Thomas Wheeler ruled in favor of Amazon in the case, according to an order posted to the court’s online docket. This could pave the way for Amazon to start work on the CIA cloud services — which would provide computing power, storage, and other online services to the agency — but IBM has said it will appeal the court’s decision.
In mid-March, word arrived that Amazon had inked a $600 million deal with the CIA, but IBM protested the contract, arguing it was unfairly awarded to Amazon. In June, in response to IBM’s protest, the government’s General Accounting Office called on the CIA to reopen bidding. A month later, Amazon responded with a lawsuit.
The contract is significant not only because these massive government deals typically go to old-school tech giants such as IBM and Microsoft, but because this would be the first time Amazon would build private services in a third-party data center. Amazon is the king of the cloud game, but the company has always offered its cloud services from its own data centers, providing large pools of computing power available to a wide range of users. It had long indicated that it would not build private services for corporations or government agencies.
Now that Amazon is willing to build private services, it could signal a new era of greater competition in the cloud game — especially in the government sector.