It’s actually pretty common for the losing bidders to file protests when huge government contracts are at stake. For instance, last year IBM won a protest over a $543 million contract for wireless tracking sensors awarded to HP. But after a review of the bids, the government decided to stick with HP.
Since this is the CIA we’re talking about, most of the protest papers, like the bid itself, is confidential. So, we still don’t know exactly what the CIA is hiring Amazon to do.
We do know this contract is for a some sort of “private cloud,” sources told Konke in March, and that’s a game changer for Amazon and the cloud-computing world. Amazon, the world’s largest cloud computing vendor, has not offered private clouds before. Sharing the hardware via a public cloud is what keeps costs low.
A “private cloud” is when cloud computing hardware and software is dedicated to a single company’s use, typically in its own data center, which can make the data center more efficient. Companies like IBM, HP, VMware, Citrix are all in the private-cloud business.
Many enterprises are wary of Amazon. Nearly every other cloud computing vendor, IBM included, markets their cloud by saying that that their service is safer and more reliable than Amazon’s. The CIA’s massive contract with Amazon throws cold water on that idea.
Amazon has been working hard to win more enterprise business, too. It recently beefed up security that can wall off a customer’s data, making its cloud act like a private cloud, while still sharing hardware and keeping costs low. This is likely the kind of private cloud Amazon is building for the CIA. But it could be getting ready to jump into the classic private cloud business, too.
Either way, Amazon is putting other cloud computing vendors on notice with this contract.
If the CIA cloud proceeds, it will convince other enterprises that Amazon is a safe, reliable, enterprise-grade choice as enterprises look to spend an $80 billion on new cloud services by 2016.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions