Amazon's CIA Deal: A Change of Heart?

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Mark Scott Social Media Thinker , DOC Marketing

Posted on August 2nd 2013

Amazon's CIA Deal: A Change of Heart?

amazon and the CIAAfter the rumors have been verified, it is safe to openly say that Amazon has entered business relations with one of the most important agencies in the US government – the Central Intelligence Agency. Instead of acting as a regular web host, which is what Amazon does for thousands of people who host websites through Amazon Web Services (AWS), this time we’re talking about something truly peculiar.

Aside for the price, which AWS put at $600 million, the next most fascinating fact about the deal is in its very essence. According to released information, Amazon is going to be building a private cloud for the CIA – something that the company largely claimed to detest in its earlier statements.

The cloud computing market, estimated to be making $131 billion annually, used to be philosophically split in half. On one hand, new-age progressive companies like Amazon and Google claimed that computing should be done in a “public cloud”, meaning that the computations should be handled by hardware in the data center of the cloud-providing company. Others, like Microsoft, HP, Dell and VMWare, took advantage of the situation and offered to build private clouds, where computation was handled inside the company’s own data center, claiming that this provided better security.

Yet at this point, one of the major proponents of public cloud computing, Amazon, has agreed to build a private cloud for the CIA. Those who have been following the development of the company are quite surprised, to say the least. Nevertheless, the financial benefits for Amazon will be immense, which is why experts tend to think of this venture as a step forward for the company.

Public representatives of Amazon Web Services have been called to clear up the controversy, but the company provides only canned responses, claiming that this one particular deal does not change the company’s stance on the subject, and Amazon will continue to favor the public cloud as a better solution. The company claims to already provide solutions for the government sector, like GovCloud and FinCloud.

Still, the fact of the matter is that both GovCloud and FinCloud are services which utilize the hardware at Amazon’s own data center, instead of the customers’, so that really doesn’t prove anything in AWS’s defense.

The reason for the abundance of publicly available information on the Amazon-CIA deal is due to the fact that the public bid was contested by competitor IBM, forcing Amazon to lower the price for building a private cloud for the CIA.

Amazon admirers, on average, are very disappointed in the company’s shift of policy, and even go as far as accusing the executives of AWS of hypocrisy. Whether or not such accusations are valid, it is clear that Amazon has a lot to earn from such a lucrative deal with the CIA. Experts claim that its competitors – major companies like IBM, Microsoft, and VMware – have a lot to fear, if Amazon were to permanently join the private cloud market they’ve been recently exploiting as a niche. Whether AWS is going to pursue private cloud computing or not is something we’re yet to see.

 
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Mark Scott

Social Media Thinker , DOC Marketing

Mark helps his clients first understand what Social Media can bring to their business, be that brand awareness, customer engagement, customer service or income generation and then developing, defining and implementing a plan for their business. Mark is the owner of DOC Marketing a social media & SEO company. He is also a writer for All-Biz-Finance.com

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