In general, the term “private cloud” means using cloud computing technologies in a company’s own data center. This still uses hardware hosted by Amazon, but adds extra security to make it behave more like a private datacenter.
If Amazon were really to enter the private cloud business, this could be a big threat to VMware and Citrix, the two biggest players in this market.
Whether Amazon has had a massive change of heart about private clouds or not, gaining the CIA as a customer is a major coup. Competitors like IBM, HP, and Rackspace say their clouds are more reliable and far more secure than Amazon’s.
Link: http://www.businessinsider.com/cia-600-million-deal-for-amazons-cloud-2013-3