IBM announced yesterday that it has filed a formal protest with the US Government Accountability Office about the structure of the 10-year JEDI cloud contract with the 10 billion dollars won by the winner of the Pentagon. The protest only came a day before the bidding process would be closed. As IBM put it in a blog post, they took problems with the single-vendor approach. They are certainly not alone.
Almost every supplier that has a shortage of Amazon, which has largely remained silent, complains about this strategy. IBM certainly stands for a difficult fight against Amazon and Microsoft.
IBM does not hide the fact that it thinks the contract is written for Amazon to win and they believe that the one-vendor approach simply is not logical. "No company in the world would build a cloud like JEDI would do and then get to work for a decade." JEDI turns its back on the preferences of Congress and administration, is a bad use of taxpayers' money and is written with just one company in mind. "IBM wrote in the blog post why it protested against the deal before a decision was made or the bidding was even closed.
For the record, DOD spokesman Heather Babb told TechCrunch last month that bidding is open and that no supplier has any preference. "The JEDI Cloud final RFP reflects the unique and critical needs of DOD, using the best practices of competitive pricing and security – no suppliers have been chosen," she said.
Like Oracle, which filed its own protest in August, IBM is a traditional supplier that was late in the cloud. It started a journey to a cloud company in 2013 when it purchased Infrastructure as a Service vendor SoftLayer and has since used its checkbook to purchase software services and then add it to SoftLayer. IBM has focused on building cloud services around AI, security, big data, blockchain and other emerging technologies.
Both IBM and Oracle have a problem with the one-vendor approach, in particular an approach that locks the government for a period of ten years. It is worth pointing out that the contract is in fact a first two-year agreement with two additional options for three years and a last option for two years. The DOD has left open the possibility that this may not last for the full 10 years.
It is also worthwhile to put the contract in perspective. Although 10 years and $ 10 billion is nothing to sneeze, it is not that the market is changing as it seems, not when some predict that the cloud will very quickly become $ 100 billion a year.
IBM uses the blog post as a kind of sales talk about why it's a good choice, while at the same time pointing out the flaws in a single vendor's approach and complains that it's targeting a single nameless vendor that we all know is Amazon.
The bidding process closes today and unless something changes as a result of these protests, the winner will be selected next year April