A Closer Look At The Amazon-CIA Deal

The hot headlines haven’t ceased since the news about the CIA's $600 million contract with Amazon went public. The issue is a political uproar slowly unraveling as it continues to play with people's imaginations.

More than that, it's an omen about what's happening in the next few years when it comes to cloud computing, domain hosting, and information sharing. The deal has implications for anyone who wants to do anything in the cloud, from host a website to run complex apps.

First, IBM protested the agreement. Second, the Government Accountability Office or GAO sustained two of IBM's three points of protest. Third, Amazon does not show any signs of yielding. Fourth, the CIA is yet to issue a decision regarding the GAO's recommendations. Fifth, numerous implications have been offered by industry experts.

IBM to GAO: It's Irrational

In an attempt to assert itself, IBM raised objections over the CIA's decision to work with Amazon Web Services or AWS. IBM's objection is summed up in the following points.

First - CIA to IBM: The Proposal is High Risk

After its proposal was evaluated as "high risk" by the CIA, IBM stood up and said that the rating was "irrational." Clearly, IBM is known as a major player when it comes to government contracting. Over the years, the company managed to play it right by leveraging its price to the innovations it is chosen to build.

While it does not have as much cloud service provision experience, its $2 billion purchase of private cloud company SoftLayer Technologies was seen by many as a gateway to potentially expand its cloud service infrastructure. This point was well-taken, but it was not sustained by GAO.

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Second - GAO to CIA: Unreasonable

IBM objected to how the CIA evaluated pricing and ended up choosing AWS. It is clear that IBM offered a lower bid against Amazon. The GAO agreed with the company when it came to how the CIA adjusted the price in reference to test scenarios meant to determine who is more capable of handling huge amounts of information.

Because these are only test scenarios, the results can lead to different interpretations. Thus, GAO called the evaluation strategy "unreasonable."

Third - GAO to CIA: The Solicitation Requirement was Relaxed

IBM says that the CIA did not offer opportunities to other potential companies when it comes to other cloud computing innovations. This line from the contract was particularly questioned: "only software developed and provided by Amazon."

If this makes it to the final agreement, then it would appear that the CIA has gone a bit relaxed over AWS in reference to solicitation requirements which lean on fair opportunities. Is the contract exclusively for Amazon? The details are unclear.

Are You Ready?

Whether or not the CIA will respond favorably to IBM is a matter of importance. First, if AWS prevails, there is a reason to believe that it is to be trusted when it comes to cloud computing. Second, the Amazon cloud may become a hybrid – a huge space of public clouds with walls for private clouds at the same time.

Third, if AWS plans to build a private cloud exclusively for the CIA, other federal government agencies will follow suit. That leaves something for consumers to ponder: the safety of their information in government clouds.

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