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Cloudy Battle in Los Angeles: Microturf vs. Googzilla

An epic battle is brewing out West with much more than a lucrative technology contract at stake: Microsoft Office or Google's cloud?

As the Los Angeles Times reported yesterday, Microsoft and Google are bidding for a $7.25 million contract to replace the city of Los Angeles' outdated email system. Los Angeles put out a call for bids in 2008. "Google Apps got the nod because city administrators believed it would be cheaper and less labor-intensive," writes LA Times reporter David Sarno.

We all knew this day of reckoning was coming. For Microsoft, the fight to hold on to its Office base is on. Google Apps, the Web-based office suite that includes the viral Gmail, promises less overhead and potentially big savings to fiscally strapped cities, corporations and college campuses.

In addition to dispatching teams of lobbyists, both Steve Ballmer and Eric Schmidt have offered to put in appearances at city hall, if city officials think it will help, according to a city councilman quoted in the article.

The LA Times article underscores the broader significance of winning these potentially game-changing contracts:

As the battle plays out in executive suites and information technology departments around the U.S., the outcome could determine whether businesses continue to store software and data on their own computers, as most do now, or allow companies such as Google to store it all online in the so-called digital cloud.

"This is a story of two very large companies going head to head in a battle for the future of the heart and soul of the technology world," said David B. Yoffie, a dean and professor of business strategy at the Harvard Business School. "If Google wins, the way that we look at our day-to-day computing will be 100% focused on the cloud."

Issues raised by Microsoft reps and others involved in the fight for fiscal dollars swirl around reliability –- that recent Gmail outage was a godsend -- data security and questioning the actual cost savings. These same concerns will be front and center as developers and their employers evaluate whether to host applications on-premise, off-site or some combination. What strategies should companies employ to make the most of their resources as Microsoft's cloud and others become viable solutions?

Can Microsoft seriously play both sides of the fence in these battles when it is commercializing its own Azure cloud in November? Express your thoughts below or drop me a line at [email protected]

Posted by Kathleen Richards on 09/29/2009 at 1:15 PM


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