Google and Amazon win Israel’s NIS 4b. Nimbus cloud tender

After months of waiting, Amazon and Google were selected to provide cloud services to the Israeli government as part of its massive Nimbus project.

The two IT giants will set up cloudbased data centers, as the first step in a plan to move much of the government’s IT infrastructure to the cloud, at an initial investment of NIS 4 billion. They beat out bids on the project from Microsoft, Oracle and IBM.

The Nimbus Project is intended to provide a comprehensive and in-depth solution for the provision of cloud services to the government, the defense system and other bodies in the economy.

It will house huge amounts of sensitive data, improving efficiency and reducing bureaucracy. The project will require extensive investments in infrastructure and, for security reasons, will have to operate independently of any other cloud service region in the world, with the capacity to provide all the nation’s long-term needs.

The project includes four parts: 1) purchase and construction of the cloud infrastructure, 2) formulation of the government policy for migration to the cloud, 3) integration and migration to the cloud, and 4) implementation and optimization of cloud activity.

Google and Amazon, through its AWS subsidiary, will split some parts of the setup process and compete with each other for other portions, a Finance Ministry official explained.

For part two of the project, Somekh Chaikin-KPMG was selected to provide consulting and help establish a centralized governance function, beating out international consulting firms such as Deloitte, Ernst & Young, McKinsey and HPE.

For the third part of the project, a tender has been issued in which dozens of local suppliers will be selected to assist in the migration of government systems to the cloud and the development of systems in the cloud environment. A tender for the fourth part of the project will be issued in the future, the Finance Ministry said.

Industry sources believe that including Amazon in the project could provide significant benefits for the Israeli economy beyond the government project itself. AWS is by far the world’s largest cloud company, with an estimated 47% of the entire cloud market in 2019. Amazon currently operates 26 server farm “regions” around the world, and building a 27th in Israel would open up doors for innovation and investment as well as new employment opportunities.

Fierce competition for this tender has sparked competition for cloud data centers around the country.

In February, Oracle said it was launching an underground cloud data center in Jerusalem, extending over four floors at a depth of 50 meters below ground level.

And earlier this week, Microsoft announced that it would open a large cloud region in Israel in early 2022. Microsoft has been providing Israel’s cloud computing infrastructure until now, although the system is seen as outdated.