The Trouble With IBM

In the summer of 2012, five American technology companies bid on a project for a demanding new client: the CIA. The spy agency was collecting so much information, its computers couldn’t keep up. To deal with the onslaught of data, the CIA wanted to build its own private cloud computing system—an internal version of the vast fleets of efficient, adaptable servers that run technically complex commercial services such as Netflix. For the agency, the power of the cloud was tantalizing. “It is nearly within our grasp to compute on all human-generated information,” the CIA’s chief technology officer, Ira “Gus” Hunt, told a gathering of industry leaders earlier that year, calling it “high noon in the Information Age.” For the bidders, more was at stake than a piece of the lucrative federal IT market. Whoever won the 10-year, $600 million contract could boast that its technology met the highest standards, with the tightest security, at the most competitive prices, at a time when customers of all kinds were beginning to spend more on data and analytics.

IBM was one of two finalists. The company would have been a logical, even obvious, choice. Big Blue had a decades-long history of contracting with the federal government, and many of the breakthroughs in distributed computing can be traced back to its labs. The cloud was a priority and a point of pride. In 2012, IBM’s new chief executive officer, Virginia Rometty, used her first speech to shareholders to describe big data as a “vast new natural resource” that would fuel the company’s growth for a decade.