Is Amazon.com, Inc. (AMZN) Winning the Cloud Wars?

Cloud computing will be a huge and growing industry going forward. The rise of the cloud will provide storage and access to massive amounts of data. Besides just storage, this data will also be interpreted and used efficiently to better industry performance and connect devices. Amazon.com, Inc. (NASDAQ:AMZN) is emerging as a leader in cloud computing, but will they keep their lead?

We like you more, but we have to give the other guy a chance…

Amazon.com, Inc. (NASDAQ:AMZN) recently (thought they) won a $600 million private cloud contract with the CIA, and then International Business Machines Corp. (NYSE:IBM) made a big deal about the whole affair by filing a formal protest. While it would have only seemed natural for International Business Machines Corp. (NYSE:IBM) to score a huge, bureaucratic private cloud deal automatically, it was Amazon.com, Inc. (NASDAQ:AMZN)’s name that surprisingly popped up. While IBM’s $94 million a year estimate easily beat out Amazon.com, Inc. (NASDAQ:AMZN)’s annual offer of $148 million, a partially-redacted report prepared by the US Government Accountability Office made it clear the CIA felt that:

“While IBM’s proposal offered an evaluated [deleted] price advantage over 5 years, the [source selection authority] concluded that this advantage was offset by Amazon’s superior technical solution.”

Score card source provided by The Register

So Amazon.com, Inc. (NASDAQ:AMZN) was seen as simply better–at least according to the CIA. Who would have thought that the more classical federal contractor would have lost out to the largest public cloud infrastructure provider? Especially for a deal involving a private-cloud, something which Amazon.com, Inc. (NASDAQ:AMZN) had at one point in time indicated that it was opposed to.

An industrial victory…

The ‘Industrial Internet’ is a concept that General Electric Company (NYSE:GE) has been talking about for some time. Apparently as much as $500 million in investment money will be coming from GE to develop it, according to CEO Jeff Immelt. GE will need to utilize cloud computing to make their Industrial Internet work and tap into the newly created market, especially if analysts are correct in predicting that it could be worth hundreds of billions of dollars over the next ten years. Bill Ruh, vice president for GE’s global software center, commented on his company’s plans on utilizing the cloud:

“It is only in the ability to quickly analyze, understand, and put machine-based data to work in real-time that points us to a society that benefits from the promise of big data.”