Amazon-IBM court battle set to begin

Oral arguments are about to begin in the U.S. Court of Federal Claims as Amazon fights a GAO decision to uphold an IBM protest of a $600 million CIA cloud contract that went to Amazon.

EDITOR'S NOTE: This story originally was published on FCW.com.

The next act in the battle between Amazon Web Services and IBM for the opportunity to develop a cloud computing infrastructure for the CIA, the NSA and the rest of intelligence community opens Oct. 7, and the stakes could hardly be higher.

The U.S. Court of Federal Claims will decide whether the Government Accountability Office was right in June when it sustained IBM's bid protest against AWS's $600 million contract award from the CIA in early 2013. Following GAO's ruling, which directed the CIA to reopen negotiations and rebid the contract, AWS filed a complaint essentially asking the court to overturn the decision.

Oral arguments begin Monday – assuming the government shutdown does not affect the court docket – and Judge Thomas Wheeler will preside over a case that may have repercussions across the technology space. A decision is expected in mid-October.

Of course, money is on the line. A half-billion dollars and change is a lot of money in cloud revenue, and it's a particularly significant sum in the federal sector, where most agencies have yet to utilize cloud for more than the most rudimentary IT services.

Yet far more than money is at stake between these two tech behemoths.

Reputations matter, especially in Washington, where they play an immeasurable but important role in deal-making. IBM has a well-established track record as a contractor to civilian, defense and intelligence agencies, but AWS's aggressive foray into the federal cloud computing market suggests the landscape may be shifting.

Whichever company receives the award gets instant fed-cred. If IBM snatches the first-of-its-kind deal with the CIA away from AWS, Big Blue proves its staying power in an ever-changing tech arena; if AWS lands the contract, it will have proven itself a player, forcing its way into a market ripe with opportunities.

This is not lost on the leaders of both companies' federal efforts.

"It's always good to have people who are perceived as competition, it pushes all of us to do better things," AWS Vice President of Worldwide Public Sector Teresa Carlson told FCW in an interview. "We are moving the cheese. We're trying to look at IT differently."

Carlson said "new-school" approaches to IT such as pay-as-you-use service can lower costs and drive mission success. AWS attacked the cloud computing market early on and hasn't let up since.

IBM's Anne Altman, meanwhile, told FCW that the company has six years of experience in cloud computing and isn't the cloud newbie it's sometimes made out to be. IBM also has decades of experience working for the government, which Altman said helps separate it from challengers in the federal cloud market, especially in the high-stakes game of intelligence data.

"Experience is something to think of, and we have served some of the most mission critical environments for a long time," said Altman, who is general manager of IBM's U.S. federal business. She added that IBM would not have to "learn on the job."

The CIA accepted new bids from both companies in August, but the agency is waiting until the Claims Court ruling to disclose a decision. The new bids from AWs and IBM likely differ significantly from the bids they put forth in 2012 when the CIA first announced it was seeking a cloud solution.

Since FCW first reported the CIA's award to AWS in March and IBM's subsequent bid protest in May, both companies' bid figures and technical specs were put in the public spotlight -- not to mention each other's.

AWS has since added more than 150 new services to its repertoire, including Glacier storage, for rarely accessed data, and Redshift, its petabyte-scale cloud-based data warehouse. And in May it received certification under Federal Risk Authorization Management Program (FedRAMP) certification, the government's rigorous cloud computing security standards.

IBM hasn't been idle, either.

Big Blue made a huge $2 billion move to purchase SoftLayer Technologies, the world's largest privately held cloud computing infrastructure. IBM's federal team expects SoftLayer's acquisition to mitigate the apparent gap between IBM's and AWS's technical solutions as noted by GAO's formal bid protest ruling. In its ruling, GAO said the CIA chose AWS over IBM – despite IBM offering a cheaper solution – because AWS offered a "superior technical solution."

And the two companies have plenty of other competition in the federal cloud space as well. There are now nine FedRAMP-certified providers, with more in the pipeline. And Verizon, which provides a wide range of agencies with enterprise cloud services, on Oct. 3 announced new computing and storage offerings that promise faster deployment and better pricing. Verizon Terremark Public Sector's Chief Operation Officer Norm Laudermilch, speaking with FCW prior to the announcement, said that both services are already in the FedRAMP approval process.

For the CIA cloud deal, however, it's a two-horse race. And all eyes are on Oct. 7.

NEXT STORY: Buchanan & Edwards taps new COO

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.