Google Drops Government Suit in Competition With Microsoft

Google drops its lawsuit versus the Department of Interior, the government agency it sued last year for picking Microsoft cloud collaboration software without looking at Google Apps or others.

Google (NASDAQ:GOOG) nixed its lawsuit versus the Department of Interior after the government agency decided to forego procuring a cloud-based email and collaboration system from Microsoft (NASDAQ:MSFT) without looking at other vendors.

The DOI in 2009 selected Microsoft's Business Productivity Online Suite (BPOS)-Federal software suite, agreeing to pay the software giant $59.3 million for its 88,000 employees to use the Web services over five years.

Google sued the DOI last October in the U.S. Court of Federal Claims, claiming the government agency set its sights on Microsoft without pursuing alternatives such as the rival Google Apps suite, which offers Web-based Gmail and Google Docs collaboration software.

Google asked Judge Susan Braden to halt the DOI from proceeding with installing Microsoft BPOS-Federal at the DOI.

Braden Sept. 27 convened a status hearing where she said Google withdrew its lawsuit after the DOI relinquished its rights to the Microsoft contract. The DOI claimed the research it used in picking the software giant's product "is now stale in light of new developments in technology and entrants into the market."

"The court has determined that the interests of justice are served by dismissing this case," Braden wrote in her ruling.

Braden said the DOI is currently preparing a new request for information from vendors from whom it may purchase cloud email and collaboration providers.

"We're pleased with the outcome of our discussions with the Department of Interior, and look forward to the opportunity to compete for its business and save taxpayers money," a Google spokesperson told eWEEK.

UPDATED: Microsoft chimed in with a tone showing it's a good sport:

"We are pleased the case has been dismissed, and that the Department of Interior can proceed to obtain the secure email system it needs. We are fully prepared to continue competing for the Department's business and are confident that we offer the best cloud solutions and value."

Google Apps essentially kick-started the cloud collaboration software market in 2007. Microsoft came on strong in 2010 with BPOS, providing a mix of hybrid on-premises and cloud services. BPOS is now part of Microsoft Office 365, which launched formally this past summer.

Microsoft secured the United States Department of Agriculture's business for collaboration software in May 2010. Google landed a cloud collaboration contract with the General Services Administration late last year.

The two engaged in a nasty war of semantics over whether Google Apps had a crucial government security accreditation.