American warriors are great at winning sweeping victories. Our soldiers, sailors, and Air Force members are happiest when they’re on the move, sweeping forward and defeating the enemy.
That isn’t always the case with the bureaucrats that support American fighters, though. They often seem to prefer long-term deals that lock in today’s conventional wisdom. In some cases that means “preparing to fight the last war.” In others, it may leave the Pentagon unprepared for the future of confrontations in cyberspace.
For example, Defense Department bureaucrats are currently planning to award a long-term contract to handle all of the Pentagon’s data (from battle plans to soldiers’ dental records) to a single cloud services provider. It’s a $10 billion, winner-take-all deal that would last for 10 years or more. And let’s face it: that’s essentially a lifetime contract. There’s little chance other providers could come in after being locked out for a decade and compete. That could place the actual value in the tens of billions of dollars in future revenue.
The program is nicknamed JEDI (Joint Enterprise Defense Infrastructure). But when JEDI was unveiled this summer, “the deal appeared to be rigged in favor of a single provider: Amazon,” writes May Jeong in Vanity Fair. “According to insiders familiar with the 1,375-page request for proposal, the language contains a host of technical stipulations that only Amazon can meet, making it hard for other leading cloud-services providers to win — or even apply for — the contract.”
As I have been explaining for months now, this was in effect a no-bid contract with a predetermined outcome in favor of Jeff Bezos and supported we’ve been told by General James Mattis from his position as Secretary of Defense.
Now, on one level the Pentagon is doing the right thing. It would be foolish to ignore cloud computing and its impact on military security and readiness. It’s clearly the future: companies and organizations storing their information on external computer servers instead of paying to install and run servers of their own.
It would also be foolish to pretend Amazon.com (AWS) isn’t the market leader in this area. It currently provides a third of cloud services, while its closest competitor provides just 13 percent. But what’s true today won’t always be true. There are more companies coming into the cloud competing space. And it is becoming easier to spread data across multiple platforms.
“With a growing number of trustworthy, third-party tools, it’s becoming easier for businesses to migrate, manage, and monitor data across multiple cloud providers — not just AWS,” the research firm CB Insights notes. “As a result, companies are employing ‘multi-cloud’ strategies that are changing the structure of the cloud industry and the power dynamics that lie within.” And that makes the most sense.
Competition makes everything better, and less expensive. If AWS has a 10-year, exclusive contract, it has little reason to innovate or bring down prices. If it faces multiple competitors in real time, they’ll all be innovating and working to deliver better products at better prices. Real continuous competition would keep capitalism at work. We would all benefit as a result.
Instead, the Amazon deal smacks of cronyism of the worst kind.
It’s no coincidence that the contract seems written to favor AWS. After all, Amazon spends $13 million each year on lobbying and employs more than 100 people. The Wall Street Journal observes that Amazon now invests more money in lobbying than ExxonMobil or Walmart. Think about how impressive that number really is and more importantly why it is.
Meanwhile, Jeff Bezos has purchased the local Washington newspaper, and is remodeling a mansion where he plans to host D.C.’s movers-and-shakers. Including, one expects, Defense Secretary James Mattis, who’s already a personal friend. Bezos must expect to reap the rewards of all that spending, and a plum Pentagon contract would be well worth the effort.
By spreading information across several providers, customers can encourage competition and drive down prices. That’s exactly what the military should want: secure data at the best price, and competition among providers to improve service and reduce costs over the years.
The Pentagon should open up its request for proposals to allow multiple cloud providers. There’s still time to strike a better deal but do the insiders have the courage to make it happen?
We will keep you posted.
Steve Gruber is a conservative talk show host with 25 affiliates in Michigan. "The Steve Gruber Show" launched in 2012 with just four affiliates and has grown into the most powerful name in talk radio across Michigan. Steve has been named “Best Morning Personality” by the Michigan Association of Broadcasters five years in a row. His conservative, common-sense philosophy was developed during his time growing up in rural Michigan. Steve’s early career found him in several newsrooms including WILX, Lansing where he honed his investigative journalism and interviewing skills. He became the main news anchor of the station and before long was offered a job with NBC in Columbus, Ohio. While working for NBC, he covered the incredible launch of John Glenn, age 77, into space at Cape Canaveral, White Supremacists in Ohio, and the deadly game of selling prescription medication online. Steve was nominated for an Emmy in 2000. To read more of this reports — Click Here Now.
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