If government IT leaders have concluded they need dedicated data center infrastructure, and Google can't provide that, isn't Google knocking itself out of competition? The hook Google points to in this case is that the department, according to the lawsuit, said Microsoft's the only vendor that can meet its needs, including for security.

That's where a proposed new cloud-app security process could give Google a big boost, in competing for both government and business contracts.

The U.S. government is proposing a new process, called FedRAMP, to certify whether cloud-based apps meet federal security requirements. As my colleague J. Nicholas Hoover writes:

Google has a strong security reputation. But this kind of certification would give it an official seal, one that suggests it's executing on the specific security needs of enterprise IT. It's only a start, since agencies can and must still consider a range of risk factors beyond the apps' capabilities. But it would help make sure security doesn't get the door slammed in Google's face. If Google can get certified, an IT leader in business or government who's tempted to write off Google for security concerns would have to answer "Why's it good enough for the U.S. army, or the IRS?"

Security's only table stakes, though, and in fact we'll see security becomes less and less of a barrier to companies choosing online e-mail and collaboration. Microsoft CEO Steve Ballmer says every single CIO he talks with is discussing online e-mail. Certifications like the FedRAMP will accelerate that discussion. But security is falling as a concern already. Our most recent InformationWeek Analytics research, just out of the field, shows 31% of companies who aren't using SaaS cite security, down eight points from a year ago.

No, the battle will increasingly shape up over features, prices, and flexibility, not security. Microsoft's the team to beat, with its powerful suite that includes Exchange and SharePoint, and now promises to bring in Office in a meaningful way, for the first time. But Google will get its shots, even without the lawsuits and hair pulling.

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