Amazon is eyeing billions in federal contracts

OVER THE past decade Amazon Web Services (AWS) lured untold numbers of consumers and corporations onto its billowing cloud. The division earned its giant e-commerce parent $7.3bn in operating profits last year. It could soon be earning more. Jeff Bezos, Amazon’s boss, is going after a potentially more lucrative customer: the government. Amazon has outspent all technology firms on lobbying in the first quarter, and is building a second headquarters in Virginia, near the Pentagon.

No wonder. Next month the Defence Department may award a cloud-computing contract worth $10bn. The Joint Enterprise Defence Infrastructure (JEDI) initiative aims to create a unified “war-fighter cloud” to modernise the Pentagon’s existing networks and data centres. In April AWS and Microsoft edged out Oracle and IBM onto the final shortlist.

JEDI is just the start. America’s federal agencies were slow to adopt cloud computing, notes Gary Labovich of Booz Allen Hamilton, a consultancy. The CIA led the way in 2013 by awarding a $600m cloud contract to Amazon (familiarising cautious officials with AWS). Today agencies are outsourcing with gusto. Bloomberg Government, a research outfit, reckons that annual spending on cloud computing by the federal bureaucracy will leap to $5.3bn this year, from $2.5bn in 2015. The feds will pay an extra $4.6bn for...

via Business Feeds

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