Texas and Amazon Unite on Cloud Services Contract

The Texas Department of Information Resources has negotiated a contract with Amazon Web Services to provide further cloud technologies to state agencies.

by / February 9, 2015
Amazon and Texas have partnered on a cloud services contract. Gil C / Shutterstock.com

The Texas Department of Information Resources (DIR) and Amazon Web Services have partnered to make it easier for state agencies and other customers of the DIR to move to the cloud. 

The DIR has negotiated a contract with Amazon that enables state customers to buy cloud services directly through the vendor. Amazon is one of 22 companies the DIR has contracts with for cloud technology under its cooperative contracts program. Prior to the new arrangement, Texas agencies had to conduct their own separate procurements and vendor solicitations.

While the DIR has contracts with various Amazon reseller businesses, the new contract is the first statewide agreement Amazon has held, according to Shannon Kelley, contract manager with the Texas DIR. Kelley explained that Texas agencies have been asking for a cloud services on-contract, and she said she felt the long process of vetting the security, privacy, disaster recovery and customer support terms of the deal will ultimately benefit DIR customers in the long run.

“I hope it’ll be a huge help to our customers,” Kelley said. “We’ve been able to negotiate terms and conditions that I think would be extremely difficult for any individual agency to negotiate on their own behalf. We were able to negotiate on behalf of the whole state of Texas.”

Amazon’s contract with Texas DIR is for one year, with three renewal options. While Kelley said there’s no discount pricing on Amazon cloud offerings for agencies, Amazon doesn’t require customers to purchase technical support, which can take down the cost “considerably.” She noted that differs from most contracts with Amazon resellers, who generally require the purchase of support.

The consideration of those types of costs, along with risk assessment and overall due diligence has taken customers a bit of time to figure out what applications are most appropriate to move to the cloud, Kelley added. But Texas is starting to see an uptick in interest.

“They are starting to get the idea that there can be a cost savings and using these contracts can be a good value for them,” she said, referring to the DIR’s customers.

Texas’ Cooperative Contracts program has come under fire in recent months, however. An investigation by the Houston Chronicle found that the program may be making it easier for public officials to give taxpayer money to favored companies.

The Chronicle reported that approximately 75 percent of the companies who apply to be a part of the program are accepted, which came as a surprise to Todd Kimbriel, interim director of the DIR.

"I think that's too high," Kimbriel told the Chronicle. "We're going to have to take a hard look at that process and tighten it down."

Kelley, however, said the DIR saved Texas approximately $275 million in fiscal 2014 through all of its cooperative contracts, including the cloud.

In regard to agency use of and general value of the Amazon contract, it’s too early to tell, said Thomas Johnson, spokesman for the DIR. The deal was effective on Oct. 10 of last year, but due to the holidays and reporting cycle, the exact number of sales is still unavailable.

Amazon WorkMail, a new email and calendaring cloud offering from the company, isn’t one of the new applications available under the DIR’s contract, however. Kelley explained that the DIR’s agreement with Amazon was about “very specifically defined cloud technologies,” and didn’t include WorkMail. But she added that cloud-based email services have been regularly assessed at the DIR, so Amazon’s solution is eligible for solicitation.

An Amazon Web Services spokesperson told Government Technology that the company doesn’t have any details about Amazon WorkMail or its role in the government space yet.

Brian Heaton

Brian Heaton was a writer for Government Technology magazine from 2011 to mid-2015.