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10/28/2009
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Four Possible Reasons Why L.A. Chose Google Over Microsoft

The Los Angeles City Council has chosen Google over Microsoft for 30,000 city employees' email accounts. What better place than Tinseltown for this tech industry drama to play out, with one councilman even delivering a choice line about whether cloud computing could push the city off the edge of a cliff (a drama AND an action film). But we're still waiting for an ending that answers this question: Why Google over Microsoft?

The Los Angeles City Council has chosen Google over Microsoft for 30,000 city employees' email accounts. What better place than Tinseltown for this tech industry drama to play out, with one councilman even delivering a choice line about whether cloud computing could push the city off the edge of a cliff (a drama AND an action film). But we're still waiting for an ending that answers this question: Why Google over Microsoft?In a story posted Tuesday, Los Angeles Times reporter David Sarno wrote that after two hours of debate, the council voted unanimously to award Google/Computer Sciences Corp. the $7.25 million contract. Sarno tells us council members had debated the security and real cost savings of Google Apps. We don't learn what was resolved during that two-hour discussion, but we get the idea that the city isn't 100 percent convinced of 100 percent data security. "It's unclear if this is cutting edge, or the edge of a cliff and we're about to step off," Councilman Paul Koretz told the LA Times.

This was a hugely important deal to Google and Microsoft, both of which realize that other cash-strapped governments will look at the massive city of L.A. as a cloud case study. (L.A. also considered upgrading its on-premises version of Novell GroupWise, but the drama was around Google and Microsoft, which reportedly spent huge amounts of money to send lobbyists to L.A.). Microsoft's bid was based on its Business Productivity Online Suite, which is its cloud, or SaaS, or whatever-you-want-to-call-it inexpensive hosted version of Exchange, which became available earlier this year. It costs $15 per user/month, and includes Exchange, SharePoint, Office Communications, and Live Meeting. Exchange alone is $10 a month. Meanwhile, Google Apps, which includes Gmail, Docs, Calendar, and Sites, costs a little more than $4 a month.

So did price kill Microsoft's bid? That could be. But what's interesting here is that council members seem to have signed the deal with some lingering concerns about data security--given the cliff comment--and Microsoft has far more experience in dealing with large enterprise accounts than Google. And, if the cloud computing experiment didn't work with Microsoft Online, L.A. could move its email systems to onsite or single-tenant-hosted Exchange servers. There is no equivalent of Google servers. So why Google over Microsoft? Here are a few ideas:

1) Total cost of the contract bids. We know what Google and Microsoft charge on a monthly per-seat basis, but what's important are the details of the final bids, which haven't surfaced. Google has built an IT infrastructure from the ground up on scaling out Google Apps to billions of people, and it's learned how to do this very cheaply. Microsoft is first and foremost an enterprise software company, and still figuring out its cost structure for cloud computing. Maybe it couldn't figure it out in time for this deal, and the final bid from Google and its contractor on the job, Computer Sciences Corp., was too good to ignore. As we can see by monthly pricing alone, Microsoft can't or isn't willing to match Google.

2) Google's new focus on governments' needs. According to this letter sent Sept. 15 from the city's GM and CTO, Randi Levin, to a council member, Google "will provide a new separate data environment called 'GovCloud'. The GovCloud will store both applications and data in a completely segregated environment that will only be used by Public Agencies (Federal, State and Local)… ." Levin notes that the "GovCloud goal is to build a parallel, segregated instance of the Google cloud to run Google Apps (Gmail, Calendar, Docs, Sites, Talk, etc.)" that will run separately from the Google "standard" cloud. Data will be encrypted and be stored on systems located only within the U.S., accessible only by U.S. citizens with background checks, Levin wrote.

3) Microsoft is still playing catch-up. It doesn't yet have an enterprise-ready, SaaS version of its Office suite. That's due out next year. But in addition to Gmail, L.A. employees also get Google Docs, which includes spreadsheets and presentations. Meanwhile, the council said that it'll reduce the number of Microsoft Office licenses it has, and just keep them for the power users. So what if Docs presentations doesn't hold a candle to PowerPoint-it's free, and how many employees really need PowerPoint?

4) Star power. Google is to the tech industry what Brangelina is to Hollywood. It's the ultimate superstar, the flavor of the month, and everyone wants a piece of it. Knowing this, some council members may have gone into that two-hour debate secretly rooting for Google. Everybody loves the "new kid in town"-- that's a storyline as old as the Hollywood hills.

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