Amazon wins major victory in CIA cloud dispute with IBM

Alistair Barr | USA TODAY

Amazon won a major victory in an unusually public dispute with IBM over a $600 million contract to supply the CIA with cloud computing services.

On Oct. 7, U.S. Court of Federal Claims Judge Thomas Wheeler ruled in favor of Amazon Web Services, the fast-growing cloud business of the world's largest Internet retailer.

AWS, as the business is known, started life as a supplier of remote computer processing power and storage to small start-ups. However, it is pushing to win more large corporations and government organizations as clients, putting it in competition with some of the world's largest enterprise tech companies including IBM, Oracle and HP.

AWS's enterprise push got a boost earlier this year when it won the CIA contract, beating out IBM and some other large tech companies. However, IBM appealed, prompting a review of the bidding process by the U.S. Government Accountability Office. The GAO recommended changes to the CIA bidding process, but Amazon challenged that in court. Its arguments prevailed this week.

"We are pleased with the Court's decision and look forward to resuming our work on this important contract with our customer," an AWS spokeswoman said.

IBM spokesman Clint Roswell said the company will appeal the decision.

"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," he said in a statement.