If Amazon Beats IBM For CIA Cloud Deal, It Could Shake Up A Whole New Market

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Andy Jassy, Amazon

Amazon

As Amazon and IBM duke it out over a  $600 million, 10-year cloud computing contract  with the CIA, Amazon is aggressively courting other government customers. 

On Tuesday, a top exec for Amazon's cloud business, known as Amazon Web Services, didn't downplay the importance of landing big government agency contracts. 

"The federal government opportunity is enormous," Adam Selipsky, an AWS VP, told  The Wall Street Journal's Spencer Ante . "We believe that will be a very significant business for Amazon Web Services going forward."

Amazon and the CIA inked the cloud contract in March, as first reported by  Frank Konkel at Federal Computer Week . IBM, which also bid on the contract, is  trying to convince the government  to block the deal. 

Amazon doesn't talk much about its cloud business, so the timing of  Selipsky's comments could be taken as a warning shot to IBM and other enterprise tech vendors. 

If Amazon prevails over IBM, it could gain access to a new market where it hasn't played before.  

AWS is the leader in "public cloud" services, where customers rent access to servers and storage and apps running in Amazon data centers.

But the CIA  is said to want a "private cloud"—which usually means hardware and software that runs in an company's own data center. Enterprises prefer this because they're afraid of putting their data in someone else's data center. 

The thing is, Amazon doesn't sell private clouds. Companies that want private clouds that work with AWS can get them from Eucalyptus Systems, its business partner. 

So if the CIA picks Amazon to build its private cloud, that would give IBM and other private cloud vendors like Microsoft, HP, VMware and Citrix, a formidable new competitor that is already wreaking havoc on their businesses. 



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