JACOB ADELMANLOS ANGELES (AP) ¿ City Council members tentatively approved a multimillion-dollar proposal Tuesday to tap Google Inc. for government e-mail and other Internet services, a boon for the Web giant as it seeks to wrest market share for office software from rival Microsoft Corp. The Council voted unanimously for the $7.2 million deal with contractor Computer Sciences Corp. to replace many city computer systems with the so-called Google Apps services. An amendment added shortly before the vote makes the contract contingent on Computer Science agreeing to pay a preset penalty if a security breach occurs. The contractor's project manager David Barber said he believed such an agreement would be reached. The city's police officers' union and privacy advocates had raised security concerns over the Google contract because it places data online rather than on individual computers under the city's direct control. Under the deal, Google will provide e-mail, calendar, online chatting and other services to 30,000 city employees. The Council chose Google's offer over competing bids from Microsoft and more than a dozen other technology firms eager to score the nation's second second-largest city as a client.
The move will also end the city's 7-year contract to use Novell Inc.'s GroupWise e-mail and record-keeping software, which city workers have complained is slow and crash-prone. Novell senior vice president said during the Council hearing that many city departments were not using the most recent version of GroupWise and reiterated an offer to provide additional services for free. "The titans are fighting, and they all want our attention," said Councilman Tony Cardenas, who sponsored the legislation granting the contract to Google. The vote came amid a push by Mountain View-based Google to market its "cloud computing" services ¿ applications that run remotely on the company's own servers instead of users' desktop machines ¿ to governments and large security-conscious corporations. "In our view, this can be a watershed agreement," said Dave Girouard, president of the Google division that provides business services. "There's a lot of cities and counties around the state and around the nation who were watching this." The shift toward cloud-computing is troublesome to Microsoft, the fortunes of which are largely tethered to operating systems and office software that run on desktop machines, said technology analyst Rob Enderle.
The Redmond, Washington-based company's failure to seize the Los Angeles contract represented a setback in its efforts to compete with Google for Web-based e-mail and other applications, Enderle said. "Losing something of this size has to be really painful," he said. "It's not the death knell for them, but it's a big red flag." Microsoft vice president of state and local government Gail Thomas Flynn stressed in an e-mail that Los Angeles city workers will continue to use the company's Office software. She said that Glaxo Smith Kline PLC and Coca Cola Enterprises, as well as Ohio's statewide university system and the city of Carlsbad, California use the company's cloud-computing services. "In any cloud solution the true measure of success lies with standing up and deploying the solution as well as ensuring the security and privacy of citizens," she said. Google's e-mail service is being phased in among city workers in Washington D.C. and many large companies, such as Genentech Inc., use the company's suite of online applications. For Google, getting the Los Angeles contract is a chance to demonstrate its ability to securely handle data for a large number of users, something it is sure to highlight as it seeks more large clients, Enderle said.
Councilman Paul Koretz, who introduced the security breach amendment, voted for the contract despite reservations over whether the company's system had been sufficiently tested. "It's unclear to me whether we're on the cutting edge or if we're on the edge of a cliff about to step off," he said. Proponents repeated a City Administrative Officer estimate that the new contract would save the city some $5 million in service costs over five years, in addition to allowing the city's technology department to shed nine positions. Councilman Bill Rosendahl said he thought being Google's first big city customer was an advantage, since the company would be especially careful in the knowledge that other governments were watching. "I don't mind being the poster boy for the big cities," he said.