Amazon Web Services has won a major battle against IBM in the pursuit to build a cloud infrastructure for the intelligence community. In a ruling published today, U.S. Court of Federal Claims Judge Thomas Wheeler wrote that AWS legitimately won a $600 million contract with the CIA that IBM had contested. IBM plans to appeal the ruling. In a statement, the company said what the company offers is more cost-effective and that they have decades of experience working with the U.S. government.
The dispute arose after the General Accounting Office (GAO) published a report in February that said AWS had not met all the criteria for the bid. IBM had asked the GAO to look at the deal, contesting the bid process.
The CIA took the recommendation from the GAO and AWS appealed to the U.S. Court of Federal Claims. If the CIA had instead not accepted the GAO’s recommendation, then the issue would have been forwarded to the U.S. Congress.
Why the CIA decided not to just reject the GAO’s recommendation remains a question. But it had clearly considered AWS the best choice due to its ability to autoscale and the elasticity they could provide.
The loss is a blow for IBM, which has been investing more deeply in its infrastructure but by no means is even a close challenger to AWS.