CNBC TV recently reported that Amazon Cloud Services (AWS) huge advertisements replaced Boeing, Lockheed Martin and other companies, and occupied the walls and ground of the Pentagon subway station in a high-profile manner. Amazon, which has been bombarded by Trump many times, has once again targeted the Pentagon's business.
Recently, the US Department of Defense plans to migrate data to the cloud, and a multi-year, single-manufacturer, cloud service contract worth up to $10 billion has surfaced. It is generally believed that among the 50 companies participating in the competition, Amazon, as the industry leader, is very likely to win this contract.
Analysts believe that due to the few competitors in the cloud service field, it is difficult for the government to transfer business elsewhere. Amazon's cloud network data storage services are spread all over the world, providing more powerful computing power and being able to handle it easily in emergencies.
Amazon's move has caused strong uneasiness among competitors such as Microsoft, Google, IBM and Oracle. IBM, Microsoft and other companies have filed complaints with the U.S. Information Technology Industry Council, expressing their dissatisfaction with Amazon and the Department of Defense. Oracle CEO Katz, an early supporter of Trump, took the opportunity to complain while having dinner with the president that Amazon had an advantage in the Pentagon’s contract negotiations. A consortium aimed at blocking AWS, including companies such as Microsoft, is reportedly forming.
“We are engaged in a comprehensive and open competition to seek the best cloud provider,” Pentagon chief spokesman Dana White clarified, “This is a single contract, not a single vendor contract, not a specific vendor or business.”
But US Secretary of Defense Mattis previously said that it is possible to give a contract to a company based on the bidding situation. At the same time, he expressed appreciation for Amazon's ability to provide cloud services.
Amazon is a technology company that invested in cloud computing research and development in the early stage. Although Amazon started late in government business compared with IBM and Microsoft, in recent years, with the Pentagon's increasing investment in artificial intelligence, big data and cloud computing, AWS's position has become increasingly important.
In 2013, AWS defeated IBM and won the US $600 million contract from the US CIA. This helped Amazon open the door to commercial customers such as government security agencies and Wall Street Banks, and AWS has access to core data. Subsequently, Microsoft and Amazon won the FAA's $100 million cloud computing contract, and IBM was eliminated again.
The partnership between the U.S. government and the technology industry can be traced back to at least World War II. Companies such as IBM have long provided computers, software and related operating technologies to the U.S. Department of Defense and intelligence agencies. For the government, cooperation with technology companies can improve work efficiency and safety while reducing costs. In addition to obtaining new sources of revenue, technology companies are also technically recognized by the government.
With the government's endorsement, AWS has been smooth sailing in the cloud service market. In terms of market share, AWS currently occupies half of cloud services, and companies such as Netflix, Comcast, and Lionsgate Pictures are all users of AWS. In terms of government business, GBH Insights Market Research Company estimates that Amazon can get up to US$20 billion in business through federal cloud computing projects in the next five years.
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