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LA is latest big client for Google’s cloud service
Los Angeles’ city council looks set to pay USD7.2m to transfer all its email services to Google, handing the internet company a victory as it aims to rival Microsoft as a software provider. The contract will see the council's more than 30,000 employees move to Google's web-based email, calendar and online chatting services over the next year.
The deal is subject to a contractor, Computer Sciences Corp, agreeing with LA council to accept costs in the event of a security breach. Computer Science will be charged with implementing Google’s software. The move followed objections from a number of council members who expressed concerns about storing sensitive information on the web and questioned whether the service's security has been sufficiently tested. "It's unclear if this is cutting edge, or the edge of a cliff and we're about to step off," says council member Paul Koretz.
The recent additions of big clients such as LA council and Rentokil are important wins for Google as it seeks to increase its share of the office software market and become a major player in cloud computing. The internet company beat more than a dozen other tech firms, including both Microsoft and current supplier Novell, to get the LA contract. It hopes the deal will prove it can securely handle data and therefore win more clients.
"In our view, this can be a watershed agreement," says Dave Girouard, president of Google business services division. "There are a lot of cities and companies around the US watching this."
The shift towards cloud computing is troubling for Microsoft, whose business model depends on software that runs on PCs. Its failure to secure the LA deal is another setback in its attempts to compete in the cloud space. "This deal validates Google's model and makes Microsoft appear uncompetitive," tech analyst Rob Enderle tells StrategyEye.
However, Enderle believes Google has some way to go before it can win a definitive victory over Microsoft. "Google hasn't yet grasped how to use leverage and human behaviour to its advantage, until they do they will get point wins but are unlikely to do much damage to Microsoft's dominance," he says. "If they do, they could cut through the Microsoft base like Microsoft cut through IBM's, but faster. But 'if' is a big word."
