Office 365 provider Microsoft (News - Alert) just scored a hefty contract to deliver cloud-based e-mail, collaboration and Office apps, and they did it right in Google’s backyard.
The deal inked between Santa Clara County in California and Microsoft is a multi-year contract worth $3.6 million annually. Google (News - Alert) headquarters are located in Mountain View, Calif.—in Santa Clara County.
Officials didn’t give any specifics regarding why they chose Microsoft over their hometown favorite. Instead, the county focused on how a cloud-based Office could save them an estimated 55 percent per user.
“By standardizing the way we approach technology and procurement,” said Santa Clara County Executive Jeffrey V. Smith, “we will be able to enhance efficiencies throughout the organization and finance them within existing resources.”
With a 14 percent cloud-based office adoption rate among businesses, and with forecasts predicting that only six percent of businesses plan to head to the cloud this year, Google and Microsoft have turned their eyes toward the state, local and education (SLED) market.
Google, through partner Onix Networks, scored a contract this year to provide hosted e-mail services to the Department of the Interior, serving 88,000 DoI employees for an estimated $35 million.
Other Google successes include the states of Colorado, New Mexico, Utah and Wyoming as well as the 35,000 employees of the City of Los Angeles. Google has also scored contracts with major universities including Binghamton University, Colorado State University and the University of Delaware.
In L.A., Google’s deployment hasn’t gone well. Replacing the Novel Groupware legacy system has proven problematic, with issues related to security, migration and customization.
However, both Microsoft and Google’s engagement with the SLED market underlines the extraordinary opportunity that both companies have to promote their cloud offerings while helping cash-strapped governments to save money.
In addition to selling SLED customers on the benefits of cloud computing, Microsoft and Google have to demonstrate expertise in both crafting public sector bids and implementing those bids under strict government guidelines.
Even though government contracts come with miles of red tape, they are both stable and lucrative. And they’ve become the latest battleground in the cloud computing market.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.
Edited by Jamie Epstein