October 12, 2013
Amazon Reigns Victorious Against IBM
Amazon Web Services (AWS) has emerged from the ashes of another legal dispute, this time with long running veteran computer manufacturer IBM spewing hate and anger over the building of a new cloud infrastructure for the CIA. Last January, AWS and IBM exchanged friendly offers with the CIA over who would be given a $600 million dollar contract to build the CIA’s cloud network.
The problem started when Amazon offered a deal of about $150 million to the CIA, while IBM only invested a considerably low $94 million dollars in their contract offering. While the right business decision was to give the contract to the cheapest bidder, Amazon won the contract anyway, as they have a much better reputation with software and technology than IBM.
But it doesn’t end there; IBM was disappointed in the court’s decision to uphold a contract almost twice that of its competitors, a real swing to the gonads when you’re trying to cater to everyone’s needs. To give themselves a chance, IBM filed a complaint with lawmakers to get a repeal of the court’s decision, which was also denied as clearly the deals were issued legally.
“We are disappointed with the ruling from the US Court of Federal Claims, reversing the GAO’s recommendation to reopen the competition and correct flaws in the bidding process,” explained an IBM spokesperson in an emailed statement to Bloomberg. “This court decision seems especially inappropriate in light of the current times, since IBM’s bid was superior in many ways, including being substantially more cost-effective.”
But it seems being ‘cost-effective’ wasn’t the only thing on the CIA’s mind. On the other hand, the CIA’s decision doesn’t seem as much ‘inappropriate” as it does safe. If I walked into a corner store (for all intents and purposes, it’s a corner store) with ten dollars in hand and asked about considerably good orange juice in the freezing area, shouldn’t I have reason to buy the $10 bottle?
Most of you are quick to jump solely on the $1.39 bottle, but you often forget that this means that your bottle may not have as much in terms of quantity as it could have. Hence, you’re value is deterred. How do we combat this determent? Why, we increase the quantity, and then increase the price! Ideally everyone does this, and the principles are the same with technology.
I’m more prone to spending $100 on a tour guide than I am spending $50 on a tour guide. Why? Because to me money begets performance, which begets work, which begets preservation, which begets quality. If you began spending cheap in one area, you can expect the quality of that area to go down.
When’s the last time IBM was still relevant enough to even joke about?
Desktop computer hardware is no longer the popular thing, and with that drop in popularity IBM can feel what it’s like to watch your company be set aside for the new shiny iPhone. It’s depressing, but this industry is far too large to warrant a serious concern.
IBM will be back on their feet in no time.
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