Microsoft Unthreatened by Amazon-CIA Cloud Deal

The $600 million cloud computing deal between Amazon and the CIA may have unsettled enterprise vendors who have owned the government IT market, but Microsoft is not too shaken with this pending deal.

The vice president of Microsoft’s Worldwide Public Sector organization, Laura Ipsen, said: “Certainly, we see that [Amazon is] making inroads. I think competitors are going to come in and try things. Whether that scales, we'll see what happens.”

In January of this year, the CIA chose Amazon over IBM to develop and run a version of its “existing public cloud” which operates on the CIA’s premises, according to a report published by the U.S. Government Accountability Office (GAO) last month.

IBM attempted to block the Amazon-CIA deal by filing a protest the following month; the GAO denied parts of it, but suggested that the CIA reexamine the bids; a decision is expected to be reached early next month.

The public cloud is at present dominated by Amazon Web Services, and the wording from the GAO report suggests that Amazon may be testing the private cloud waters.

Microsoft is not concerned with this deal because government agencies do not tend to rely solely on one single vendor for their clouds. Furthermore, Microsoft’s experience of selling Windows Server, which is used by organizations to build private clouds, is something which Amazon does not have; Microsoft is certainly ready for Amazon’s challenge.

Ipsen said: “We just believe we have a solution now in cloud that works at scale. We have over a million servers, and we are very solidly in public, private and hybrid cloud.” She added that only Microsoft is doing all three at an unmatched level.

However, the CIA deal would have been a huge bonus for Microsoft, which is one of five vendors that, last July, submitted initial proposals for the CIA deal. Ipsen did not comment on the details of the Microsoft bid, but noted: “I think we had a very compelling bid in many respects.”

Microsoft has “a lot of ongoing work at the federal level” with the Department of Defense and intelligence organizations, according to Ipsen. She added that Microsoft has developed its cloud around regulatory requirements which is also beneficial.

Ipsen said: “This is a big competitive advantage for us, and an area where others are playing catch-up. We're the only company that makes our products HIPAA-compliant from a software and devices standpoint. Not even Apple does that.” (CY) Link