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Slideshow: Top 20 Government Cloud Service Providers

In one of the biggest cloud computing deployments in federal government, the U.S. Department of Agriculture is about to begin using Microsoft’s Exchange Online and other cloud services for 120,000 employees and contractors.

The project is the latest in an escalating battle between Microsoft and Google to provide applications as a service to government agencies. The General Services Administration last week selected Unisys in a deal to deliver Google Apps to 17,000 GSA employees. A week earlier, Google and reseller Onix Networks sued the Department of Interior over an RFP for hosted e-mail that they contend is skewed in Microsoft’s favor.

This round goes to Microsoft and Dell, which is prime contractor on the deal. The USDA will tap into Microsoft’s Exchange, SharePoint, Office Communications, and Live Meeting online services for 100,000 employees and 20,000 contractors. After several months of preparation, the services rollout is due to begin within a few weeks. Dell was awarded the contract in May under a General Services Administration Schedule 70 agreement.

USDA CIO Chris Smith said the move to Microsoft’s Online Services is part of a broader initiative to modernize and streamline Agriculture’s IT infrastructure, including 21 separate e-mail systems, and make the latest generation of communications and collaboration tools available to its workers.

The department originally planned to offer Exchange from within its own data centers, and had begun to do so, but decided earlier this year to shift to Microsoft Online Services. The cloud service market has “matured to the point that it’s a solid, stable offering,” said Smith. “It was the right opportunity at the right time for us.”

The online services will be offered from Microsoft data center facilities that are devoted to government agencies and condoned off from business and consumer accounts. As part of its government cloud offering, Microsoft promises that all data will be stored within the United States and that only employees who are U.S. citizens will have access to those facilities. Microsoft’s cloud infrastructure was recently designated as meeting the requirements of the Federal Information Security Management Act, a key security threshold for government agencies.

The question of where government data is stored geographically came up in GSA’s recent contract award to Google. GSA’s RFP did not specify that data must be stored within the United States, a provision that leaves open the possibility that Google could house GSA data in offshore facilities.

In contrast, Smith, citing security concerns, insisted that USDA data stay within the United States. “We put that out as a requirement that we saw as important,” he said.

The deal does not extend to Microsoft's Azure infrastructure cloud services. Smith said USDA could begin tapping into infrastructure as a service as a next step in its strategy in the "very near future."

Microsoft and 19 other cloud services vendors have been approved to provide infrastructure as a service through GSA's Apps.gov portal. (For more, see InformationWeek's "Top 20 Government Cloud Service Providers.")

The scope of the USDA deployment is in the range of Microsoft's largest commercial accounts for its online services. Ron Markezich, VP of Microsoft Online, says Microsoft has "a number" of commercial accounts serving 100,000-plus users. With 300,000 users, GlaxoSmithKline is the largest among them.

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