According to Nikkei Asian Review, the Japanese government has agreed on a deal of more than 30 billion yen ($273 million) with Amazon Web Services (AWS) till 2026. A fair part of the agreement includes the migration of human resource systems and document management tools onto the cloud environment.

The timeline to migrate the entire workload on cloud, currently handled by different ministries, is expected to be four to eight years. The initial phase of the transformation involves developing 20 core systems for different government institutions. The reports cited that the Japanese government turned the decision in AWS’s favor due to the in-depth service portfolio (i.e., offering quality services) and its pricing.

As compared to the on-prem solutions, cloud is expected to save two-third of the cost invested in maintaining current infrastructure. A thoughtful and necessary decision.

One of the key reasons to choose AWS is the global reach in terms of Availability Zones (AZs). The government demanded cloud service providers should have data centers in Japan due to security reasons. This means that Chinese companies cannot offer services for government endeavors in Japan, which requires to manage the data at home.

A confidence booster for AWS

Last year has been a headache for AWS in terms of grabbing the big deals. One such deal was the JEDI deal – the Pentagon’s $10 billion deal over a period of 10 years. Unfortunately, the biggest ever defense cloud deal went to Microsoft Azure, even after AWS being the frontrunner the whole time.

Suggested Read: The JEDI Contract: What really happened?

Later, AWS filed a protest against Pentagon’s decision to offer the JEDI deal to Microsoft. Amazon has been confident in beating any cloud provider at this time with global reach and resources. In fact, the procurement committee of DoD clearly remarked Amazon’s cloud capabilities as “good” and “excellent”. Yet, the political intervention by President Donald Trump prevented AWS to sign the deal.

Signing a deal with one of the technologically advanced nation will help AWS to boost confidence; and maintain the competitive gap.

Japanese Companie left behind

Three major players, i.e., Amazon Web Services, Microsoft Azure, and Google Cloud Platform, are currently leading the global cloud industry. Till now, NTT Data has fulfilled the technical requirements of the Japanese government; their service cost the government about 700 billion yen. But this time, Amazon will be helping the government to achieve digital transformation using cloud technologies. Clearly, Japanese companies have no chances against AWS when it comes to competing for better cloud services.

The efforts to increase the cloud-footprint has always been a snail walk for the Japanese government due to concerns over data breaches. The deliberate efforts have put Japan behind the U.S. and Europe in terms of cloud adoption for government operations.

Nobody can forget the major outage at AWS’s data center in Japan last year. So, building infrastructure using only one cloud can have a severe impact during outage scenarios. The Japanese government will need to formulate strategies to tackle such issues and, at the same time, addressing security concerns.