Amazon Web Services extends a $1 billion credit to reduce federal government's cloud expenses and solidify its position as service provider till 2028 at the earliest.
U.S. Government Announces $1 Billion AWS Deal for Cloud Services
In a move to centralize and streamline technology procurement, the U.S. federal government has entered into a significant agreement with Amazon Web Services (AWS). The multi-year deal, worth up to $1 billion, will provide federal agencies with cloud service credits to modernize IT infrastructure and accelerate the adoption of cloud services and AI capabilities.
The deal, managed by the General Services Administration (GSA), is part of the OneGov purchasing strategy, which was announced in April 2023. This strategy aims to reshape how government agencies buy goods and services, with a focus on IT products like cloud platforms.
Under the OneGov approach, agencies access pre-approved cloud credits rather than direct cash payments. This streamlined method simplifies procurement and accelerates migration to cloud services. The AWS agreement offers "streamlined engagement" between AWS and federal agencies, potentially leading to greater savings on direct contracts.
The deal provides federal agencies with access to a variety of AWS services, including:
- Cloud resources such as data storage, computing power, and AI/ML tools.
- Funding for workforce training and skills development to support cloud adoption.
- Infrastructure to support large-scale AI projects, including machine learning and natural language models.
The AWS agreement is the latest in a series of OneGov deals. Previous agreements include discounted Oracle technology for government buyers and $1 access to ChatGPT Enterprise for agencies. The goal of these deals is to enhance critical service delivery, leverage cloud and advanced AI technologies, and reduce costs for the government.
Michael Rigas, the acting GSA administrator, stated that the AWS deal will allow federal agencies to deliver critical services more effectively. The agreement runs until December 31, 2028, and can be used for cloud adoption, training, and other government needs. All federal agencies can now access these OneGov deals, including the AWS, Oracle, and OpenAI agreements.
OneGov operates under the philosophy of eliminating isolated purchases in favor of large, government-wide agreements with standardized terms and pricing. The strategy aims to eventually cover all goods and services purchased by government agencies, not just IT products.
The US government's adoption of cloud services and AI technologies is a response to the increasing demand for modern, efficient, and secure infrastructure. The AWS deal comes at a time when concerns about the security of cloud services have been raised, with ProPublica's recent exposure of Microsoft using Chinese workers to support US government Azure customers. However, the GSA has stated that the AWS announcement does not appear to be directly connected to the Microsoft news.
In conclusion, the $1 billion AWS agreement fits into OneGov as a centralized, scalable, and technology-forward procurement method designed to drive comprehensive federal cloud adoption, reduce reliance on legacy systems, and cultivate AI capabilities while streamlining government spending and vendor management.
[1] GSA Announces OneGov Purchasing Strategy: https://www.gsa.gov/news/press-releases/2023/04/gsa-announces-onegov-purchasing-strategy [2] GSA Announces AWS OneGov Deal: https://www.gsa.gov/news/press-releases/2023/05/gsa-announces-aws-onegov-deal [3] GSA Announces Oracle OneGov Deal: https://www.gsa.gov/news/press-releases/2023/04/gsa-announces-oracle-onegov-deal [4] GSA Announces ChatGPT Enterprise OneGov Deal: https://www.gsa.gov/news/press-releases/2023/04/gsa-announces-chatgpt-enterprise-onegov-deal
- The $1 billion AWS deal, part of the OneGov purchasing strategy, will enable federal agencies to not only access cloud resources and infrastructure for large-scale AI projects, but also secure funding for workforce training and skills development to support the enterprise-wide adoption of AI technology within the finance sector.
- The recent announcement of the US government's AWS deal exemplifies the government's commitment to modernizing its IT infrastructure by utilizing cloud services, further integrating AI capabilities into core operations, and promoting technology advancements within the enterprise sectors of finance and beyond.
