Google, Microsoft Battle For Government Email Deal

Google jumped out to a head start this week in the government cloud applications market, obtaining a key security certification that Microsoft lacks. As Microsoft races to obtain this certification, a large email contract with an influential U.S. government agency hangs in the balance.

Google's on Monday unveiled Google Apps For Government, a new offering that stores user data in Google's data centers in the continental U.S., on servers isolated in separate cages. This extra security helped Google achieve compliance with the Federal Information Security Management Act of 2002 (FISMA), which has been a hurdle for government agencies looking to deploy cloud apps.

Google and Microsoft are both fighting for a 15,000 seat email contract with the General Services Administration (GSA), which oversees management and support functions for federal agencies, and at this point in time Google appears to have the upper hand. On Monday, The Wall Street Journal reported that the GSA has certified Google Apps For Government as suitable for deployment.

Microsoft's Business Productivity Online Suite Federal, a dedicated offering that runs on segregated servers in Microsoft data centers, has yet to achieve FISMA compliance. However, Microsoft says it's working toward this goal.

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"We have been working closely with the GSA and expect to receive official FISMA authorization very soon," a Microsoft spokesperson said Tuesday in an email.

With FISMA certification, Google will attract Federal and state and local government agencies that have been holding off on moving to the cloud, according to solution providers. "Google's security certification is pretty critical to the sales process moving forward, especially given the current administration's focus on moving IT to the cloud," said Allen Falcon, CEO of Horizon Info Services, a Westborough, Mass.-based Google Apps reseller.

The GSA contract would be another major coup for Google, which last year beat out Microsoft for a 34,000 seat Google Apps deal with the City of Los Angeles. That project has run into delays due to security and performance concerns, but Google says these are simply part of dealing with such a large and complex customer.

Both Google and Microsoft are leveraging their strengths in their battle to be the go-to vendor for cloud applications. Google has cloud computing in its DNA, while Microsoft can point to deep experience in selling to -- and navigating the complex needs of -- enterprise customers.

"Microsoft definitely has the larger enterprise footprint, and they're the platform and interface that users are accustomed to," said Tony Safoian, president and CEO of SADA Systems, a North Hollywood, Calif.-based solution provider that partners with both companies.

However, Microsoft's on premise software business, and the need to protect the massive revenue stream it generates, delayed its arrival to the cloud party. Microsoft is now frantically positioning itself as a cloud pioneer, and it's terrified that Google could start winning more deals on the strength of its deeper cloud experience and the broader government march to the cloud.

If the economy continues to stagger, Google's cost savings could be a determining factor for state and local government customers looking to dig out from massive budget deficits.

"Customers have plenty of security and privacy questions with cloud apps, but Google Apps For Government is going to make these conversations easier," said Mike Cohn, vice president of marketing and product management for Cloud Sherpas, an Atlanta-based Google Apps solution provider.