Microsoft and Amazon Score Huge Cloud Services Deal with FAA

Computer Sciences (NYSE:CSC) just scored a massive cloud services deal with the Federal Aviation Administration (FAA), and business partners Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) are in on the deal as well. 
The CSC team will be charged with consolidating FAA data centers and migrating the government agency’s data and systems to a hybrid cloud environment. The contract is valued at approximately $109 million, but could potentially reach $1 billion over the next 10 years.
The group will use CSC’s cloud agility platform for efficient cloud deployment, while using Amazon Web Services (AWS) and Microsoft Azure for data and services.
“CSC and our alliance partners are demonstrating the unique value that we as a team can bring to deliver an innovative, next-gen IT cloud solution that drives the FAA’s mission forward,” said CSC President and CEO Mike Lawrie in a statement. “By coming together as we have, we are in a unique position to help meet the agency’s operational and budgetary challenges over the life of the program.”

As Fortune notes, it’s unclear whether other groups bid on the contract. However, such federal contracts “are seen as feathers in the cap of cloud providers,” as all companies must obtain certain federal certifications in order to bid for government contracts.
This isn’t the first government deal for Microsoft or Amazon. However, the deal for the CSC team is definitely worth noting, as the FAA has normally teamed up with IBM (NYSE:IBM) in the past. Writing for Business Insider, Julie Bort states that the agency has a long history with IBM, and suggests that it is interesting that both groups didn’t do another deal here. Amazon beat out IBM for a different government contract in 2013 when it won a $600-million contract for cloud services for the CIA.
In any case, the FAA’s adoption of cloud computing speaks to increasing adoption of the cloud and could signal a growing market for cloud services. As Frederic Lardinois of TechCrunch put it, “[i]t’s no secret that government agencies don’t exactly move fast.”

“Government adoption of cloud computing for mission applications is accelerating rapidly, and we are pleased to help FAA’s transition to the cloud,” said Teresa Carlson, vice president of Worldwide Public Sector, Amazon Web Services, in Monday’s release. “With AWS’s security and compliance standards — like FedRAMP, ITAR and SRG — CSC will be able to rapidly enable FAA to realize the benefits of agility, cost savings, and flexibility.”

Company news

VMware (NYSE:VMW) is planning to expand its cloud-native technology portfolio with the aim of improving the developer experience for building applications using container technology. The company will introduce two technology previews, VMware vSphere Integrated Containers and VMware Photon Platform. “Customers will be able to jumpstart their container initiatives on top of their existing VMware vSphere environments or consume new infrastructure designed specifically for cloud-native applications,” explained VMware CTO Ray O’Farrell in the company’s release.
VersaPay (TSXV:VPY) reported that it has added a major US print media company to its roster. “We are delighted that this mid-west U.S. firm with over 1,000,000 readers across 30 newspapers and 24 print publications has decided to adopt our ARC technology to reinvent their account receivables process and improve their customers’ experience,” stated VersaPay CEO Craig O’Neill. The company will use VersaPay’s ARC system to automate its accounts receivable process.
 
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.