IBM was awarded a contract to run a pilot program, that could lay the basis for this company to build, own, and operate data centers on behalf of the US Army. This contract, worth $62 million, is called the Army Private Cloud Enterprise, and it is the first step ever taken by the US Army to tap into the expertise of commercial IT industry to run a large-scale data center on its behalf.

The exact document was not revealed, so the scope of the project is not known. But press releases show that IBM will get one base year, and four option years to build a data center, and manage it for the Army. Also, this new data center would start off as a migration point for all the systems and applications that are currently hosted at different government data centers located at Redstone Arsenal in the city of Huntsville, Alabama. It is also expected that other systems from the Army, spanning all its operations, would be moved to this center within the next five years, provided of course, there are no challenges during this period.

Though this award was in the offing for some time now, it’s still a surprise as the Army deals with large amounts of classified data, including secret-level data that are hugely sensitive and can have immediate ramifications for national security. Despite this level of confidentiality, the Army has chosen a private company to run data centers on its behalf. Why?

Cloud computing offers many benefits that are hard for any organization to ignore, and the Army is no exception. This award, in many ways, represents the first step towards implementing the Army’s cloud computing strategy, that is aimed to create an excellent user-experience, improve mission command, and reduce IT costs as well as the overall fiscal footprint of the Army.

Also, Redstone Arsenal is considered to be a safe haven, so it makes for an ideal location to try out the idea of a private cloud for the Army, within the gates of its own military establishment. In addition, the Army plans to implement the necessary secret controls to handle such high levels of secure data.

This contract is sure to have a substantial positive impact for the Army, the primary of which is the choice to reduce inefficient data centers that are run by different governmental agencies. Currently, the Army runs anywhere between 200 to 1,200 data centers, most of which are done under the guidance of the Office of Management and Budget (OMB). With this contract in place, it plans to close at least 350 of these data centers over the next two years. In Redstone Arsenal alone, it owns 11 out of the 24 data centers that operate here. Over the next couple years, the Army wants to consolidate all its information and applications within the 11 data centers it owns. Such a move is sure to save tons of taxpayer dollars for the government, and this money can be used for beneficial social, welfare, and economic programs.