US Court Rules in Favor of AWS Over IBM in CIA Cloud Battle

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Amazon won a court battle Monday against IBM over a $600 million dollar cloud computing contract awarded by the CIA.

In January 2013, AWS was successful in winning the cloud contract from the CIA, a decision that was later contested by IBM. Big Blue argued that the outcome of the bidding didn’t make sense because AWS’ contract would cost the CIA $54 million dollars more than IBM’s proposal.

After a formal investigation by the US Government Accountability Office in June, it was recommended that the CIA re-evaluate parts of its decision. The CIA said that it ultimately went with AWS not for cost, but for its “superior technical solution.”

On Monday, IBM was downgraded as analysts warned that IBM’s traditional server business was in trouble and the shift to cloud and SaaS will “adversely impact all of IBM’s segments in some way,”according to a report by ZDNet.

Government contracts provide a huge opportunity for cloud providers, who aside from enterprise clients, typically deal with accounts paid by smaller customers on-the-go or on a monthly basis. The CIA contract win will give AWS some much needed cred in the enterprise and government cloud sectors.

In September, Savvis won a $1.1 million, three-year contract for providing cloud hosting to the Federal Communications Commission. 

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About the Author

Nicole Henderson is the Editor in Chief of the Web Host Industry Review where she covers daily news and features online, as well as in print. She has a bachelor of journalism from Ryerson University in Toronto. You can find her on Twitter @NicoleHenderson.

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