An interesting development has arisen in the story of the CIA hiring Amazon to build a Private Cloud. By all accounts, Amazon had already begun work on this project, when IBM swooped in and filed a formal protest. What’s going on here?

The government’s formal protest process is a central part of federal transparency efforts, designed to avoid back-room deals and other non-competitive procurements. Everybody should have a fair chance at bidding for government business, after all . Furthermore, the Government Accountability Office (GAO), which is an agency of Congress rather than the Executive Branch, acts as referee. Checks and balances in action.

Fair enough. IBM, or any other vendor for that matter, should have the same chance to bid for this work as Amazon. The CIA should then follow established procedures for selecting the winning bidder, based upon cost and ability to execute, rather than upon who’s your golf buddy or worse, who’s paying the largest kickback.

But that’s not really the situation here. The reality of the Infrastructure-as-a-Service (IaaS) marketplace today is that Amazon is the only player who’s figured out how to make this stuff work. They are by far the leader in IaaS, and they’re pulling further ahead every day. True, IBM is in the pack of followers, and they have strong hardware and software offerings. But even IBM can’t hold a candle to Amazon when it comes to building IaaS for the CIA or anybody else.

While it’s always a possibility that a competitor will underbid Amazon for this business — and a company as large as IBM could certainly afford to do so if they wished — the simple fact of the matter is that the CIA has already made the right choice based upon ability to deliver. IBM may be able to delay the construction of the CIA’s Private Cloud, but no foreseeable delay will give IBM enough time to figure out how to implement IaaS as well as Amazon already can.