Amazon.com, Inc. (NASDAQ:AMZN) won a first round in a public dispute with International Business Machines Corp. (NYSE:IBM) regarding the $600 million contract to supply the CIA with cloud computing services. The ruling in favor of Amazon Web Services (AWS) was handed down on October 7th by the United States of Federal Claims Judge Thomas Wheeler, says a report from USA Today.
Amazon puts up a tough fight to established players
Amazon Web Services was established as a supplier of remote computer processing power and storage of small startups. Eventually, the service has tried to win bigger contracts from government and large business houses giving tough competition to biggest service providers like IBM, Oracle and HP.
Amazon.com, Inc. (NASDAQ:AMZN) got hold over certification under the FedRamp (Federal Risk and Authorization Management Program) in May, which will bring down its cost of implementing the cloud services. FedRamp is a binding government wide program that standardizes security assessment, authorization, and monitoring for cloud products and services.
CIA contract a major win for Amazon
A major breakthrough was achieved by this service segment when it won the contract from the CIA, defeating IBM and other tech biggies. IBM called for a bid process review by the U.S. Government Accountability Office (GAO). Following the review, GAO made some changes in the process to which Amazon objected.
In cloud computing, information ranging from pictures to documents are stored across interconnected networks with no centralized location. Cloud computing plays an important role in storing data of all government agencies. Amazon.com, Inc. (NASDAQ:AMZN) has eventually become one of the most dominant players providing infrastructure for cloud computing, and has been using this technology for several years to sell apparel, books and other retailer products.
Other government agencies, like the United States department of Health and Human service, have already hired Amazon.com, Inc. (NASDAQ:AMZN) for some of its cloud services in May. The Kindle tablet maker will start getting more contracts after the win over IBM and retaining contract from CIA.
IBM to appeal against the ruling
“We are pleased with the Court’s decision and look forward to resuming our work on this important contract with our customer,” an AWS spokeswoman said.
IBM spokesman Clint Roswell said the company will appeal the decision. Roswell added that the company is not satisfied with the court’s decision of reversing the GAO’s decision to reopen the competition.