Cloud Providers Vie for a Government Edge

While the federal market for cloud technologies promises to be a prime opportunity for vendors, it is becoming clear that providers cannot expect the phone to ring with orders from federal agencies. Instead, vendors will have to make investments in product development, marketing and other activities related to the IT requirements of federal agencies.

In fact, IT vendors are putting significant resources into the marketing of cloud technologies to the federal government. Microsoft, for example, recently introduced a cloud technology offering specifically targeted at federal agencies. Amazon, meanwhile, has invested considerably in the legal defense of a contract to provide cloud-based services to the U.S. Central Intelligence Agency.

As a result of prevailing in the legal case, Amazon is now gearing up to deliver on the CIA cloud project that has a potential value of US$600 million over several years.

The CIA originally selected Amazon Web Services for the contract, but the award was challenged by IBM, which filed a protest with the U.S. General Accountability Office. In a decision issued on June 6, 2013, the GAO determined that the CIA’s process for selecting AWS was flawed in some respects regarding fairness to all parties, and recommended that the CIA re-open the competition. The agency agreed to review the award.

However, AWS took issue with the GAO decision and asked the U.S. Court of Federal Claims to examine the case.

In an October 8, 2013, decision, the court essentially reversed the GAO position and ruled that the CIA’s commercial cloud services contract awarded to AWS be restored. In its brief ruling from the bench, immediately following oral argument, the court did not provide any substantive information, except to grant the motion filed by AWS. The court added that the CIA and AWS “may immediately resume performance” of the contract. A complete ruling is expected at a later date.

Broad Cloud Functions Required

The CIA project requires the use of commercially managed cloud computing services that can be implemented not only by the agency itself, but throughout the entire federal intelligence community. Broad-based governmentwide implementation is becoming a feature of federal cloud installations.

Functions of the CIA project include Infrastructure-as-a-Service whereby the vendor would be responsible for networking, storage, servers and virtualization, and the intelligence agencies would be responsible for the operating system. The CIA also required the ability to automatically scale usage either up or down depending on requirements. The contemplated contract was to include a 270-day period to achieve initial operating capability, a four-year base ordering period and a three-year option.

In response the court’s decision, the CIA said in a statement provided to the E-Commerce Times by spokesperson Todd Ebitz that the agency “is pleased that it can now move forward with procuring critical cloud services for the intelligence community.”

AWS has been relatively circumspect in revealing details of the project and the legal matters surrounding the contract. However, in a statement the company said: “We are pleased with the court’s decision and look forward to resuming our work on this important contract with our customer.”

IBM, understandably, was not satisfied by the Court of Claims ruling.

“This court decision seems especially inappropriate in light of the current times, since IBM’s bid was superior in many ways, including being substantially more cost-effective,” IBM said in a statement provided to the E-Commerce Times by spokesperson Clint Roswell. “We are disappointed with the ruling from the U.S. Court of Federal Claims, reversing the GAO’s recommendation to reopen the competition and correct flaws in the bidding process.

“IBM plans to appeal this decision,” the company added. “IBM has for decades supplied the government with proven mission-critical operations. The company remains committed to provide secure, reliable and robust cloud solutions to federal agencies.”

Microsoft Enhances Federal Cloud

The AWS-IBM case underscores the need for proactive pursuit of federal business in the emerging cloud market. Microsoft’s move to bolster its cloud service for the federal government market is another case in point.

In early October the company launched a public cloud offering designed to meet “the distinct needs” of U.S. government agencies, the company said. The product, which is labeled the “Windows Azure U.S. Government Cloud,” will be hosted in Microsoft data centers located in the U.S. and managed by U.S. personnel.

“The U.S. government is eager to realize the benefits of the cloud, adopting a Cloud First policy for new investments, but most federal agencies have unique requirements when it comes to using cloud services,” Susie Adams, federal chief technology advisor for Microsoft, told the E-Commerce Times.

This includes the ability to design and deploy a combination of on-premises, private, public and hybrid cloud environments based on their security requirements.

“Microsoft is committed to supporting these initiatives and is uniquely positioned to offer the flexibility U.S. government agencies need,” Adams said.

‘Rigorous Security Requirements’

The offering will be a community cloud that will add the ability to leverage the platform for higher-security workloads like those of the Department of Defense, ensuring that Microsoft can meet the diverse needs of the U.S. government, the company said.

Among the features of the offering will be two specially constructed data centers with logical, physical and network isolation from Azure Public Cloud. All data, hardware and supporting systems will be in the continental United States, and data will reside on servers that contain only data from other U.S. federal, state and local government customers. In addition, all operators will be U.S. personnel screened for PPT-Moderate clearance.

The launch of Microsoft’s new public cloud offering came just days after the Windows Azure program was granted authorization to operate under the Federal Risk and Authorization Management Program — also known as FedRAMP, the governmentwide security program for cloud-based platforms.

The Azure authorization “demonstrates that different types of cloud services — public to private and infrastructure to software — can meet the rigorous security requirements for FedRAMP,” said Matt Goodrich, the program manager for FedRAMP, which is operated through the General Services Administration.


Another player in the government cloud marketplace has nabbed a key role in a program being developed by the U.S. Postal Service with an offering targeted to the federal sector. Specifically, USPS will use HP’s “Enterprise Cloud Services – Virtual Private Cloud for U.S. Public Sector” for the federal cloud credential exchange.

The program involves the creation of a central exchange to allow individuals and organizations secure access to federal websites and online services through a single approved digital credential mechanism. It’s designed to relieve individual federal agencies from having to set up their own security system for third-party contacts.

Last August the USPS awarded a $15 million contract to Secure Key, an identity and credential service provider, to develop the exchange. In early October Secure Key selected HP as a subcontractor to provide HP’s enterprise offering to host Secure Key’s exchange platform for the implementation of the FCCX program.

“Agencies are faced with delivering the next level of customer service as citizens are increasingly looking to the federal government to provide services online,” said Marilyn Crouther, senior vice president and general manager for the U.S. public sector of HP Enterprise Services. “HP is committed to supporting federal cloud computing initiatives like USPS’s innovative implementation of FCCX by delivering enterprise solutions that are built with security and flexibility in mind.”

John K. Higgins is a career business writer, with broad experience for a major publisher in a wide range of topics including energy, finance, environment and government policy. In his current freelance role, he reports mainly on government information technology issues for ECT News Network.

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