Google: Good enough for government work

Even as Google Inc. downplayed problems with its contract with the city of Los Angeles, it kicked up its competition with Microsoft Corp. another notch in the lucrative market of selling e-mail and other software by introducing a new version of its applications aimed at government.

Google announced the advance Monday after winning a key security clearance to sell software to the federal government. Although the clearance does not encompass classified data, Google is banking that the federal government’s seal of approval will give customers at other levels of government more confidence that its online software is a safe and reliable way to store sensitive information, 90% of which is not classified.

The clearance is the first that the U.S. government has given for online software. It marks a step forward in Google’s effort to lure business from Microsoft by promoting its products as a cheaper alternative. The two technology giants already compete for private business as well as for contracts with state and local governments.

Google Chief Executive Eric Schmidt called the business software space an “open field” as organizations consider Web-based software to cut costs. Google offers a free version of Google Apps for personal use but charges businesses $50 a year.

Microsoft this year also introduced government-specific software that is hosted at special facilities where extra security precautions are in force.

Dave Girouard, president of Google’s enterprise division, said government represented a significant opportunity for the company, which is trying to find other areas outside of Internet advertising to generate revenue. The federal government spends $76 billion on technology, according to Google.

To satisfy the federal government, Google has agreed to store information on servers located inside the United States.

Berkeley Labs, part of the Department of Energy, started using Google Apps earlier this year. More than 4,000 employees and 1,000 research partners are using Google Docs & Sites to collaborate, and 4,000 are using Google Mail. Larimer County, Colo., has also started using Google Apps for Government.

So-called “cloud computing” costs less because the administrative programs used by clients are rented, not bought, and are updated by the software provider.

But Google missed the June 30 deadline on its high-profile contract to take over Los Angeles’ e-mail system because of security concerns raised by the police department. The five-year contract with the city, for which Google outbid Microsoft, is being closely watched by other governments.

The Los Angeles Police Department has strict rules about the way its records are secured. Until Google can address the department’s concerns about the cloud-computing system, city officials said the LAPD would continue to use the old system — which means the city will have to pay for both the new and old e-mail programs at an additional cost that could top $400,000 over the next year.

City officials said Google had committed to paying for the old licenses through November, when the city’s technology agency expects to have completed the move to the new e-mail program.

Google executives called the Los Angeles deployment problems “minor issues.” A company spokesman noted that the city’s complex move to cloud-based software was the first of its kind, and that Google was pleased with the progress of the transition.