April 28, 2010, 4:07 PM — Google is a long way from usurping Microsoft as the most popular maker of office software, but it scored a big win for its enterprise division when the City of Los Angeles committed to Google's cloud apps -- a deal made even sweeter because $1.5 million of the project cost was indirectly financed by archrival Microsoft.
In the City of Los Angeles government, Google Apps is being deployed to alleviate three problems: a crushing budget deficit, IT staff shortage and widespread dissatisfaction with the current office software system.
With the city facing a $485 million projected budget deficit, the IT staff has been cut from about 800 people to 500 in the last three years. With fewer people it's getting harder to maintain in-house systems, such as the city's Novell GroupWise collaboration software, which has frustrated users with small mailbox sizes, says city CTO Randi Levin.
While an organization with more cash on hand might have chosen Microsoft Office, Levin says even if the price were the same she would have been worried about her department's ability to support an in-house mail system. Moreover, the city is in an earthquake zone but lacked a disaster-recovery system, and officials decided placing e-mail in Google's data centers would be a better way to guarantee uptime.
"We are not flush with a lot of cash these days," Levin says. "It took a lot of our resources and time to run an in-house e-mail system. We didn't have a disaster-recovery solution for e-mail, which was quite concerning, living in an earthquake zone. We felt it was critical for the City of Los Angeles to have a disaster-recovery strategy in place."
L.A. ended up with a $7.25 million project to implement Google Apps, a price that includes fees paid to Google and for consulting work from CSC. That's a lot of money, particularly for Google Apps, which is mainly used by small and midsize businesses.