Amazon Web Services gives the Trump admin $1 billion coupon
The deal provides $1 billion in credits that federal agencies can draw down on for core AWS cloud services — which will account for the majority of the $1 billion in value — as well as helping agencies shift from on-premises infrastructure to the cloud and training resources for federal employees.
The AWS deal is not exclusive. Similar OneGov agreements are in the works with other major cloud providers, including Microsoft and Google, said a senior administration official familiar with the conversations granted anonymity to discuss them. Oracle also recently signed a deal giving government agencies a 75% discount on Oracle technology.
'We're just getting started,' the senior GSA official said. 'This is a first-of-its-kind agreement, and there's a lot more to come both in the cloud space and across other high-impact industries.'
For the administration, it's a chance to solidify Trump's AI legacy by laying the groundwork for a long-term transformation of government operations.
'Through this new agreement with AWS, federal agencies will be able to enhance delivery of critical services, leverage cloud and advanced AI technologies, and dramatically reduce costs,' said GSA acting Administrator Michael Rigas.
For AWS, the partnership deepens its presence in the federal government and provides access to a huge addressable market of $80 to $100 billion dollars in moving government IT infrastructure still stored on their premises to third party cloud-providers.
'This landmark agreement marks a significant milestone in the large-scale digital transformation of government services,' said AWS CEO Matt Garman. 'As federal agencies adopt advanced technologies like artificial intelligence and machine learning, AWS is positioned to not only help them achieve immediate operational efficiencies, but also to build the foundation for a more secure and innovative government of tomorrow.'
A notable feature of the deal is its attempt to bypass value-added resellers, encouraging direct contracts between agencies and AWS.
'There is a twofold benefit,' Gruenbaum explained. 'First, you're building a direct relationship with the provider, so you can actually pick up the phone and innovate. Second, you save taxpayer dollars by avoiding the 5-7 percent lift in costs that comes from unnecessary middlemen.'
The Amazon Web Services partnership includes built-in incentives to favor direct procurement over system integrators, a structural design that reflects the Trump administration's broader vision of creating 'market tension within the federal government itself' by wielding centralized purchasing power.
'We wanted to have a deep partnership that has durability and horizon to it, they jumped at it and they set this deal to basically live through this administration,' Gruenbaum said.
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