Microsoft will soon power the United States Department of Agriculture's cloud-based Enterprise Messaging Service (EMS), including its e-mail, Web conferencing, instant messaging and document collaboration features. While the USDA's cloud migration has been underway for some months, Microsoft's touted the agreement Dec. 8 on its Website, just as its competition with Google for federal cloud contracts escalates to a new level.
"Migrating an enterprise of USDA's size and complexity from multiple environments, across multiple agencies, requires not only a trusted enterprise-ready solution, but also a partner that is able to work with us and navigate everything from archiving to authentication to mobile phone support," Chris Smith, chief information officer at USDA, wrote in a Dec. 8 statement.
Under the terms of the USDA's May 2010 contract with Dell for Microsoft Online Services, some 120,000 users across 21 e-mail systems will migrate to the consolidated cloud platform. The project has been underway for six months, and the shift to the new system will begin within the next four weeks.
Microsoft's announcement comes days after archrival Google announced a contract to provide Gmail and Google Apps to the General Services Administration. Both companies have been competing to bring their respective cloud-based productivity and communications software to both governments and large corporations. For Microsoft, such contracts represent the chance to profit from its "all in" cloud strategy; for Google, the chance to expand its revenue-generating businesses beyond search and advertising.
In November, Google sued the federal government, alleging that the Department of the Interior unfairly restricted its bid to update its e-mail and messaging system. Microsoft's BPOS-Federal suite eventually won that contract, estimated at $59 million over a five-year cycle.
Microsoft reacted strongly to news that Google had locked down the GSA contract. "There's no doubt that businesses are talking to Google, and hearing their pitch," Tom Rizzo, senior director of Microsoft Online Services, wrote in a Dec. 1 posting on the Why Microsoft blog, "but despite all the talk, Google can't avoid the fact that [oftentimes] they cannot meet the basic requirements."
Rizzo also accused Google's enterprise offerings of "inadequate product support, failure to provide a roadmap, poor interoperability with other [lines] of business applications and limited functionalities." By contrast, he argued, large public-sector organizations "have consistently valued Microsoft's cloud offerings not only because of our deep understanding of enterprise organizations, but also for their ease of use, security and privacy capabilities."
Municipal governments have become a particularly fierce battleground for the two companies. In October, New York City Mayor Michael Bloomberg and Microsoft CEO Steve Ballmer announced a partnership that would bring BPOS to around 30,000 city employees. That followed on the heels of Google's agreement to provide cloud-based applications to City of Los Angeles employees.
A recent survey by IDG Research Services suggests that such competition will only increase, given that 75 percent of companies are either integrating cloud-based solutions into their IT infrastructure, or plan to do so over the next five years. In any case, Google and Microsoft are likely to trade tit-for-tat cloud contracts for some time to come.
Editor's Note: The date of the Microsoft/USDA rollout has been changed.