Google Apps Leads Microsoft in Federal Cloud Race: 10 Reasons Why It Matters

by Clint Boulton

Google had it cozy for a few years. The company was able to lay claim to the most robust cloud computing suite in Google Apps, with Gmail; Docs for word processing, presentations and spreadsheets; and other apps. Microsoft threatened Google Apps’ peaceful existence with BPOS (Business Productivity Online Suite) and Office 2010, which offers free Office Web Apps. Winning FISMA certification and launching a government-grade collaboration suite mean Google is one-upping Microsoft.

Big deal, you say, because FISMA is just a certification, a stamp on a piece of paper? Well, Microsoft doesn’t have this stamp for BPOS, which means the GSA won’t recommend it for other federal agencies. That gives Google a competitive advantage.

Some federal agencies are migrating to cloud computing suites as a way to cut some of the federal government’s $76 billion annual computing and software budget. With FISMA certification and the corresponding Google Apps for Government, Google is looking to get in on some of the thousands of seats available in government agencies for employees who must access e-mail, word processing and other collaboration applications to work and communicate with colleagues.

“The financial pressures on the government are enormous,” said Google CEO Eric Schmidt, who frequently chats with potential government customers. This makes government agencies optimal candidates for the cloud applications. Government entities “are dying to make this transition,” Schmidt said at a media event to announce the news July 26.

The GSA, which oversees government procurement in the United States, manages 15,000 e-mail accounts serviced by IBM’s on-premises Lotus Notes suite. Google Apps for Government, in winning FISMA certification, now becomes a dog in the race for the GSA’s contract, which is up for renewal at year’s end. Microsoft is angling for this contract, but until it is FISMA-certified, it may not get serious consideration.

What does that mean? It means that potentially, Microsoft will miss out on millions of dollars’ worth of federal contracts. Worse, it means Google has the opportunity to gain more traction with Google Apps among federal agencies. And this will trickle down.

Since its cloud suite is federally certified, Google feels strongly that state and local governments may also consider Google Apps for Government as an option. FISMA may also soften the blow of Google missing the deadline for deploying Google Apps for the city of Los Angeles.

If federal, state and local governments begin endorsing Google Apps en masse, you can bet businesses will follow. This is important because Microsoft has such a strong reputation among enterprises with its on-premises collaboration applications, such as SharePoint. It’s also important in the wake of the ugly customer loss of Serena Software earlier this year to Microsoft BPOS.

Part of what makes Google Apps for Government unique is that data generated by agencies using Google Apps will be stored in separate servers in data centers away from data created by Google Apps consumers and enterprises. Thanks to this special care and feeding, security should be optimal, minimizing the risk that external data will muck up the works for Google and its government customers. This could help improve the perception of Google as a company that can’t adequately manage security and privacy needs for the data it hosts.

With Microsoft Office and SharePoint, Microsoft has the on-premises productivity and collaboration software markets locked up. Now that Microsoft is encroaching on Google’s cloud turf, Google needs to put as much distance between itself and the software giant or risk becoming just another distant challenger to the Microsoft enterprise applications hegemony.