According to a report by FCW, Amazon has been entrusted to build a "private" cloud computing system for the U.S. Central Intelligence Agency. The CIA is rumored to be outsourcing the task to Amazon in hopes of reducing its operating costs while maintaining a beat on emerging technologies.
The $600 million government contract is likely good news for Amazon. In fact, it's likely good news for the CIA too, who's existing cloud-based solution is made from a fragmented hodge-podge of numerous, highly specific private clouds.
Unlike public clouds, private clouds are often hosted on an organization's own hardware and software; however, private clouds can be hosted by a remote third-party like Amazon's S3 Web Services. Implementing security measures like firewalls, encryption and virtualization can keep a remotely hosted private cloud outside the purview users not in the organization. This practice is not without its own security concerns, however.
With security paramount, it would seem likely the CIA has employed Amazon's expertise to develop an in-house solution. Placing your private cloud system on your own network behind your own firewall is no doubt the single best way to secure your cloud. At this time though, neither Amazon nor the CIA have responded to questions about the project, so very little is known.
FCW suggests it could be related to changes brewing in how the CIA procures software and analyzes enormous data sets. Its exact purpose and uses will likely remain elusive, but it may be an effort to satisfy the Federal Cloud Computing Strategy (pdf) and the White House's "Cloud First" initiative.