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This is clearly a DoD play. The federal government as a whole is thirsty for cloud services and having a services provider like Amazon literally at their doors
by Yhippa 8y ago
This is clearly a DoD play. The federal government as a whole is thirsty for cloud services and having a services provider like Amazon literally at their doorstep is going to win them a lot of work. If they do bring good experts to government work instead of what the typical government contractors in the area provide this will be a good thing for taxpayers.
- eli 8y agoPeople keep saying this and I really don't follow. Why does the DoD care where the headquarters of the parent company of their contractor is located? Are they gonna pop in and ask questions about the Amazon retail site? Sure AWS needs a sales office in the region. And a datacenter. And a lobbying shop too. Pretty sure they got all that covered already.
- ghaff 8y agoPolitically there's probably something to be said for having a strong local economic presence. But you're probably right that it can be overstated as a factor.
- jdavis703 8y agoAs a former government contractor (and employee), I can say having the tech teams nearby is an advantage. Personal relationships should not be underestimated, even when building software for the government. If anything personal relationships are even more important as there’s a high likelihood that non-technical people will be making the decisions on what and how you build the software.
- koboll 8y agoThe thing about sales is that at a certain level of client, the clients want to speak to executives, not salespeople. If you're going to place executives in the area, then their underlings need to be there too, and so on. Putting your HQ where your executives need to be makes sense.
- jacques_chester 8y ago> The thing about sales is that at a certain level of client, the clients want to speak to executives, not salespeople. This is why all sales people are called "executives" and why all executives spend a large fraction of their time on sales.
- atonse 8y agoA lot of it is relationships. A lot of it is the kind of workforce you'll get (people already experience with DoD stuff and have the right clearances but don't want to move out of the DC/MD/VA area), and such things.
- MrMorden 8y agoAmazon's big draw for someone currently doing cleared work is being able to ditch the clearance without taking a pay cut or moving. The people who want to work for Amazon and keep the clearance have already made that move.
- bearcobra 8y agoI don't follow this logic either. Boeing has their HQ in Chicago, Raytheon in Massachusetts, UTC in Connecticut. The key thing these companies seem to do is spread their offices into relatively small states so when votes happen Senators have to go against large employees in their districts.
- kevin_thibedeau 8y agoBoeing moved it's HQ to Chicago solely to cut down on the travel time to DC.
- Aloha 8y agoBoeigs HQ also has a tiny presence too.
- nova22033 8y agoBoeing has a big presence near national airport and in the northern virginia suburbs.
- Godel_unicode 8y agoAs does Amazon.
- seanmcdirmid 8y agoBoeing HQ has nothing much to do with production, however, whereas I assume Amazon's HQ2 to have a lot of R&D in addition to its executive suite.
- moonka 8y agoBoeing moved from Washington State to Chicago.
- taurath 8y agoExecutive distance, would be my guess.
- hnmonkey 8y agoI imagine that it will make it much easier to have face-to-face happy hours, dinners, lunches, and so on. It will also enable people lobbying on behalf of Amazon to do so closer to the mothership and include people from Amazon to further strengthen their abilities. Those types of conversations do have benefit for the people they represent and are why there's a huge lobbyist industry. Those face-to-face meetings and parties and eating together really can make things happen faster than trying to broker deals from across the country through phone or video conference. I presume this is one of the main reasons behind this decision. Plus when trying to make a sale or negotiate a deal I'm sure it makes people on the other side feel better if someone says "And the people to support you or jump when you say how high are going to be 5 minutes away rather than 2 timezones away." It's almost at the point where subcontracting out is similar to just having all the work done in the same building you're already in. Seems like that would make people feel more comfortable.
- drewbailey 8y agoNot only that but AWS is already in northern VA. They operate gov-cloud out of there as well. It’s already established. This is Amazon not AWA
- nova22033 8y agoThey care because having lots of cleared consultants close to secure sites is a big help.
- erichurkman 8y agoOr: Amazon is going to heavily recruit former-DoD and government workers, luring them from low pay rates to high paying jobs. Reduce hiring friction: you don't need to convince them to uproot their families to move. They already live in the area, hell, their commute doesn't even change. Are you more likely to award contracts to AWS if you work at the DoD knowing that in two years you can move over and suddenly quintuple your salary?
- samstave 8y ago+1 If anyone in the consulting field is paying attention - right about now is almost too late to begin going out and lining up a bunch of clearance techies who can be on your secure GovCloud consulting team to provide all the services that the DoD will be needing.
- JBlue42 8y agoYeah, it seems the already available people with clearances would be the big selling point.
- moron4hire 8y agoMost of the people with clearances are already working at major consulting firms in the area.
- drawnwren 8y agoThis comment is hilarious to me. Quintuple your salary? I worked in consulting for 5 years, and I can assure you that Amazon is already paying less for equivalent candidates. I'm not sure what you think happens in government consulting, but it is nothing like government employment. Edit: The strategy you outline re: government employees is already employed by all of the large government consulting firms. Amazon is late to the game and behind the ball with their lack of awarded contracts. They might be able to catch up, but contracting is one field that has repeatedly shown itself to be resistant to disruption.
- erichurkman 8y ago
- reaperducer 8y agoWhy does the DoD care where the headquarters of the parent company of their contractor is located? Don't underestimate the power of the face-to-face meeting. There's a reason that videoconferencing didn't kill the business class airfare.
- nashashmi 8y agoA large portion of the North Virginia area commercial sector relies heavily on the services and manufacturing requested by the federal government. Do not underestimate the power of locality. It is a big factor in marketing. Having face time with clients is the chief reason you win jobs. for that reason a lot of the federal contractors are baked in and grown from Northern Virginia.
- mygo 8y ago> Why does the DoD care where the headquarters of the parent company of their contractor is located? Are they gonna pop in and ask questions about the Amazon retail site? Don't underestimate how much of a difference-maker face-to-face is. I've called and emailed people and the one thing that actually got things moving was just going to their dang office and seeing them in person. I don't think it matters how good the technology gets and how many VR-facetime conference call services develop, there's always going to be something irreplaceable about meeting in person. If there's not much of a significant difference on paper between you and the competition, it really does put you ahead of the competition if those meetings go well and the competition isn't doing it. Same for hosting dinners, etc.
- JPKab 8y agoYep, they have it covered already. I lived in Northern Virginia for 8 years. It's got a mediocre quality of life compared to other tech centers, extremely high cost of living, horrific traffic, and has a talent pool that is inflated on paper due to the misaligned incentives of the Federal government workforce (Federal government workers are promoted and hired based on arbitrary checkmarks like Masters degree: yes/no, etc) which cause people to pursue worthless graduate degrees for pay bumps. This is why there are so many diploma mill type schools with campuses there. Add in the incredible over-staffing of Federal projects (both gov't and contractor) and you get incredibly mediocre talent where a "full stack web developer" produces very little over 3 years and has an atrophied skill set. Forced me to hire based on side projects and active Github projects to weed out the huge amount of mediocrity. Bezos has political aspirations, and honestly, this makes sense from the perspective of already having massive data center presence there. He will now have large numbers of employees added to both Maryland and Virginia, giving him much more influence with Congress since congressman in general kiss the ass of large employers in their districts. Hopefully, he could have some positive influences on the Federal gov't, by having a contracting wing from Amazon that would help fix the awful, bloated, IBM-like state of the Federal agencies. They used to do great things, but like IBM, they have calcified into jobs programs with dead-sea effect staffing.
- issa 8y ago100%. My move from SF to DC was mind-blowing in the general expectations set on developers. Without hyperbole, a year of output at most gov't contracts is a couple weeks worth of work at a typical startup.
- Spooky23 8y agoIt’s easier to poach consultants and others with security clearances in DC than in Kalamazoo.
- bitexploder 8y agoPeople have some good replies but they are missing a big one. Relationships. The DoD is absolutely who you know. That is a big part of it. You have to be in the area to have skin in that game.
- gist 8y agoCloud services? This is a 2nd headquarters and Amazon is more than cloud services. They could handle the point you are making with simply a large local office. Not the entire company which is involved in a host of things that would make other areas more attractive.
- virtuallynathan 8y agoAWS already has a very large presence in the Ashburn area with offices and datacenters.
- itronitron 8y agoThis would effectively double the cost to DoD of any awarded cloud service contract to Amazon. In the form of higher cost of living for federal employees.
- bobthepanda 8y agoDC hardly needs any help to give federal employees higher COL, it's already more expensive than Seattle, and is about as expensive as Brooklyn, NYC: https://www.numbeo.com/cost-of-living/region_rankings.jsp?title=2018®ion=019 https://www.numbeo.com/cost-of-living/region_rankings.jsp?ti...
- mikeash 8y agoLooks like that’s not counting the whole metro area, so it’s kind of misleading. DC is a fairly small chunk of the region as a whole. It’s only the third most populous jurisdiction in the area.
- MrMorden 8y agoThe current locality rate for the DC-ish area (which actually goes halfway to Wilmington and Richmond) is 28.22%; thus, a GS-12-05 salary is $72k in a low-cost-of-living area and $92k in DC. The Federal Salary Council's recommended locality rate is 78.81%, bringing that notional GS-12 to $128k. So there is already somewhat of a disconnect between federal salaries and cost of living. That aside, it's easy enough for the government to fix the housing problem. They're just too invested in keeping prices high to want that.
- arh68 8y agoYou might want to be aware of the Rest-of-US locality rate, which is around 14~15%. A base pay of 72k would be ~82k w/ locality (Rest of US) vs ~92k (DC).
- benologist 8y agoAmazon is actually optimizing their HQ2 search to avoid being a benefit for taxpayers, like everything else they do.
- casefields 8y agoThe whole point of announcing the search was to get the best from the taxpaxpayers. Quit being Amazons bagman.
- creddit 8y agoSo did you just not read their post at all? They're saying exactly the same thing as you.
- smokeyj 8y agoAlexa, surveil the American public.
- blaisio 8y agoThere are lots of other good things about the area- good schools, physical room for them to grow and take over a bunch of buildings, lots of engineers and business people in the area already, etc.