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IBM Wins $1 Billion Cloud Deal with Feds
IBM Wins $1 Billion Cloud Deal with Feds
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
AUGUST
15
2013

In a demonstration of the government's confidence in the cloud -- and in IBM -- the United States Department of the Interior (DOI) awarded Big Blue a contract worth up to $1 billion. The deal comes as the DOI sets out on a decade-long IT transition to the cloud.

As part of an indefinite delivery/indefinite quantity contract, the DOI may use IBM cloud computing technologies, services and hosting as the foundation of its next generation infrastructure. Although the contract may not ultimately fetch $1 billion, it's still being touted as the largest largest-ever federal cloud contract in IT history and it could open the door for Big Blue to help other government agencies make the transition.

"IBM has been delivering trusted and secure cloud services to business and government clients for decades, and working with virtualization technologies for more than 40 years," said Anne Altman, General Manager of IBM US Federal. She went on to tout the company's long history of work in hardware, software and services combined with security offerings, R&D, and secure supply chains.

What's at Stake?

This is a big deal for IBM in more ways than one. A mistake would be costly. DOI stewards 20 percent of the nation's land. On these 500 million acres are 397 units of the national park system, 556 national wildlife refuges, 21 national conservation areas and 16 national monuments.

What's more, the department is the largest supplier and manager of water in 17 states, overseeing 476 dams and 348 reservoirs. The agency also manages the land, subsurface rights and offshore areas that produce approximately 24 percent of the nation's energy and it maintains relationships with 566 federally recognized Native American tribes with a total population of 1.7 million.

The 16 bureaus and offices that manage this mission spend more than $1 billion a year on IT. In a period of declining budgets, the DOI is shifting to a management model for IT that moves from fixed to variable, assets to services and mission impact instead of IT service metrics. The DOI has a public commitment to save $100 million a year from 2016 to 2021 and then use those savings to fund investments in new business capabilities and applications.

Why IBM is a Safe Choice

IBM could be part of those cost savings. Big Blue's solution for the DOI is based on the company's Federal Data Center capabilities, which use open computing and process standards. The DOI will leverage IBM's experience in data storage, secure file transfer, virtual machines, database, web hosting, development testing and SAP application hosting.

The department will also be able to tap IBM's Smart Cloud for Government hosted at the IBM Federal Data Center, the Smart Cloud for Enterprise commercial offerings and the IBM AIX Cloud. And other U.S. government agencies can also gain access to these IBM Cloud solutions via the DOI Foundation Cloud Hosting Services vehicle. The vehicle also allows request for quotes/task orders to be issued on behalf of other government customers including both civilian agencies and the Department of Defense.

We caught up with Zeus Kerravala, principal analyst at ZK Research, to get his take on the deal. He told us dealing with the government demands a process-oriented approach and IBM has been a successful government integrator for many years.

"The company certainly understands what federal and even state and local processes are like. So inserting IBM into what can be a complicated process for integrators isn't a big stretch," he said.

"There also a confidence in IBM. They've been a leader in cloud, certainly on the integration side, since before the term cloud was popular -- when on-demand computing was the term we threw around. When you look at the combination of overall experience, technology -- they certainly offer a full cloud stack, combined with the ability to integrate just about anybody's technology -- they are a very safe choice for government organizations," he added.

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