Reply to post: Re: Some Infighting?

Re: Some Infighting?

Some background reading on JEDI provides interesting information.

The DoD is being pillaged by some of its vendors (I will leave the reader to decide if IBM and Oracle fit into this list) and the DoD has been under significant pressure during the last three administrations to try and reduce those costs which are approaching $20bn/year.

JEDI is about controlling spiraling government (as opposed to public) cloud spending costs (currently $1.2bn/year and likely to reach $1.5bn/year in 2012 if JEDI is not implemented) and beginning to shutdown legacy data centers by consolidating ~300 facilities into AWS/Azure/Google plus ~100 others. IBM are fighting this because they run a lot of the legacy facilities, Oracle are fighting this because they were depending on the easy US Govt money to pay for their cloud expansion. The DoD are looking to reduce the number of vendors because each vendor increases the security/interconnect overheads for the larger DoD environment.

One of the causes of the spiraling costs is the DoD currently covers the cost of EVERYTHING associated with a vendor setting up a new data centre (which happens to match Oracle and IBM's proposed JEDI bids) while Azure and AWS have existing commercial arrangements with their providers allowing them to meet the DoD's requirements without incurring costs for purchasing land/building facilities etc.

Does this stop small players entering the market? Yes. Are Oracle and IBM actually small players? Could IBM/Oracle have structured their bids differently to avoid the need for lengthy implementation delays and high up front costs (i.e. caused by building new DC's from scratch including the acquisition of land)?

To put this in UK terms, this is a PPI-type venture where the government and vendors share some of the commercial risk. Azure and AWS are happy to meet those terms, others have continued to operate using the traditional "scrape the pork barrel dry" methodology.

TL;DR: JEDI isn't about a new outsourcing deal or moving to public cloud. Its about consolidating existing vendors to try and reduce costs. Smaller vendors with compelling solutions are likely to continue to get funding, but legacy vendors with old school government pricing models are likely to lose out.