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Megan Barth: Amazon's Defense Cloud-Computing Pact Raises Questions

Image: Megan Barth: Amazon's Defense Cloud-Computing Pact Raises Questions
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By    |   Thursday, 17 May 2018 02:25 PM

The news headlines are filled with talk of monopoly these days. The federal government is suing to try to prevent AT&T from linking up with Time Warner. It may take steps to prevent T-Mobile from buying Sprint.

It’s an open question just how many companies must be involved in order to deliver a healthy, competitive market. But Nicholas Economides of NYU says at least 10 players. So that’s a worthy goal, and it’s one the feds seem to be aiming toward, at least when it comes to these private communication company deals.

However, when it comes to a crucial arena—national defense—the federal government is uninterested in competition. Instead, it’s going full speed ahead to deliver a monopoly contract that could last a decade or more and choke off competition, probably for good.

The deal in question involves a contract to handle the American military’s cloud computing needs. And the Pentagon wants to hand all its business to a single provider. “We anticipate this will be a multibillion-dollar contract,” Chief Management Officer Jay Gibson tells Bloomberg. And it’s a winner-take-all deal.

That is a mistake.

As the government clearly understands in other contexts, competition is good. It drives down prices, improves quality, and delivers innovation.

Yet instead of throwing open the process and inviting many competitors in, the Pentagon is, right off the bat, planning to go with a single company to handle cloud computing.

“Whichever one of you wins this, I’m challenging you to bring your ‘A Game,’” Air Force Brigadier General David Krumm told computing companies as the “contest” launched. But how can the military be certain it’s getting A-level service, if it only gets service from one provider?

Consider that, for most of us and clearly for the military, cloud computing is quite new. If this was a mature technology, perhaps a single provider wouldn’t be as much of a concern.

Everyone acknowledges an iPhone is better than a BlackBerry, and Microsoft Word is better than WordPerfect. But what makes one cloud provider better, or more nimble than the next? Only a robust process with many participants could answer that question.

Also, of course, is the question of cost. Again, as the feds understand, competition forces companies to decrease costs. Yet instead of opening up the search for a cloud provider, the military seems eager to actively prevent competition. That’ll end up costing taxpayers plenty.

After all, as cloud services mature, those of us in the private sector are sure to enjoy decreasing prices over the next decade. Meanwhile, in 2025, Uncle Sam will still be paying 2018 prices for the cloud.

Finally, the ultimate sucker in this deal may well be all of us.

Business Insider reported in April that, even as the Pentagon was calling for bids, “behind the scenes, some Department of Defense agencies are so sure that Amazon will be awarded the contract that they are preparing for a transition to GovCloud, which is Amazon’s cloud infrastructure designed specifically for government use.”

So while there certainly won’t be competition once the deal is signed, there may not even be competition ahead of the deal either.

Amazon (AMZN) would have to be the frontrunner in any such competition. Its AWS web operation already controls about half the cloud market, and it has a deal to provide its services to the CIA.

But those should be reasons, again, to encourage competition in this space, rather than choke it off.

America’s military foes don’t plan to stand still over the next decade. They’re working to deliver fresh threats, and our military needs to be nimble enough to counter them. Locking in a long contract with a single provider to deliver cloud computing services is the wrong approach. We can do better.

Megan Barth is the co-chair of The Media Equality Project and national spokeswoman for MediaEqualizer.com, the leading online watchdog for the intersection of Media, Technology and Government.

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America’s military foes don’t plan to stand still over the next decade. They’re working to deliver fresh threats, and our military needs to be nimble enough to counter them. Locking in a long contract with a single provider to deliver cloud computing services is the wrong approach. We can do better.
amazon, defense, cloud, computing
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2018-25-17
Thursday, 17 May 2018 02:25 PM
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