Amazon, Google win Japan government cloud contract

Nikkei -- Oct 27
Japan's Digital Agency has picked Amazon Web Services and Google Cloud Platform as the first service providers for its nationwide cloud computing project, giving the U.S. tech groups a foothold in an industry dominated by domestic service providers.

The two services were chosen because they met about 350 requirements across security, data management and legal issues, among others, a Digital Agency official said on Tuesday. They will initially be used to run the agency's website, as well as by eight municipalities on a trial basis.

A Digital Agency official said the budget for government cloud computing until March 2022 is about 2 billion yen ($17 million) but the budget for the upcoming years is as yet undetermined.

The government cloud project aims to unify and standardize digital infrastructure across ministries and roughly 1,700 municipalities, which currently operate their own systems. The management of data centers and business applications are often outsourced to domestic system integrators, which government officials say led to customized systems with high maintenance costs and functions that overlap.

This so-called vendor lock-in has also prevented the speedy rollout of public services and hampered Japan's COVID-19 response.

The Digital Agency began operations in September and will control most of the government's IT budget. It is encouraging local governments to fully shift to the government cloud by fiscal year 2025. An official said shifting entirely to the cloud could reduce the annual IT budget, which currently stands at about 800 billion yen ($7 billion), by about 30%.