Bloomberg is reporting that the CIA is “planning to hire multiple companies for lucrative cloud computing deals,” a move that will likely hurt Amazon.
Amazon was the first company to gain the coveted Impact Level 6 security certification, allowing it to store classified data in the cloud. This gave the company a huge advantage when bidding on government contracts involving sensitive data. However, Microsoft ultimately beat out Amazon for the Pentagon’s JEDI contract, worth some $10 billion. In December 2019, Microsoft also became the second company to gain the Impact Level 6 certification, opening the door to more competition for Amazon.
With the CIA’s latest move, however, that door has been flung wide open, giving multiple companies the chance to compete with the leading cloud provider for lucrative and prestigious contracts.
According to Bloomberg, “the government said the contracts could last up to 15 years with a five-year base period and two five-year renewals. The estimated award date is September 2020.
“The CIA has previously indicated that it intended to spend ‘tens of billions’ of dollars on cloud computing, Bloomberg has reported. It’s unclear whether the agency has finalized an amount it plans to spend.”
With analysts already predicting Microsoft could unseat Amazon as the reigning cloud leader, this latest report is not good news for Amazon. With Microsoft expecting a “halo effect” from the JEDI contact, Amazon may well find itself losing a considerable amount of government work.