In L.A., Google Blowing Big Cloud Marketing Chance

Updated: As Google stumbles again in its Gmail deal with the City of Los Angeles, analysts say it's botching a giant cloud marketing opportunity. Will it make the same mistakes Netscape did in its bid to woo customers away from Microsoft?

Google just can't seem to get it right in the City of Angels.

The Los Angeles Times reported this week that Google missed the June 30 deadline for its closely-watched contract to move the City of Los Angeles' e-mail system over to Gmail from its current Novell Groupwise e-mail platform.

The main point of contention for Google is the Los Angeles police department, which has strict guidelines around data encryption and data segregation.

In a meeting with city council members, according to the L.A. Times, LAPD CIO Maggie Goodrich said that the department's security requirements have not been met.

When asked by a city council member which party is to blame, Goodrich replied: "In my opinion, it was Google that didn't deliver the security requirements."

Google's missed deadline comes on the heels of a leaked inter-departmental letter in mid-April showing that performance issues with the Google implementation were frustrating users of L.A.'s pilot testing program.

Rather ironically, this week's news comes on the same week that Google announced it is launching Google Apps for Government, versions of Google Apps with specific measures that address the policy and security needs of the public sector.

Google spokesperson Andrew Kovacs defended Google's work with the City of L.A., saying that the city's move to the cloud is the first of its kind and that more than 10,000 city employees are already using Google Apps for Government. Google projects that the move to Google Apps will save Los Angeles taxpayers $5.5 million in cost savings.

"It's not surprising that such a large government initiative would hit a few speed bumps along the way," says Kovacs. "We're working closely with CSC [the solution provider helping Google with the implementation] and the City to address security requirements that were not included in the original contract, and in the meantime keeping public safety officials on the City's current technology for a few more months in a manner that results in no additional payments by the City."

Yet the City of Los Angeles' bumpy attempt to "Go Google" remains a public relations predicament for the search king. L.A. defied convention by choosing Google over Microsoft Outlook even after Microsoft lobbied aggressively for the bid. It also serves as an example for other government agencies that are considering a cloud computing model for e-mail and productivity applications.

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Because Google was unable to implement its Gmail system by the June 30 deadline, nearly 20,000 city employees will remain on the old Novell e-mail system, forcing the city to pay for both the new and old e-mail programs. This could cost the city as much as $400,000 over the next year, according to the L.A. Times story.

Google's struggles to satisfy the City Of LA's requirements is also an example of how winning a large contract bid doesn't mean much if you can't meet the needs of an enterprise or government entity, says veteran technology analyst Rob Enderle.

"This is why it can take over a decade to become an enterprise vendor," says Enderle. "It seems like a little work for a lot of revenue, but the opposite is generally true."

Google's missteps with this mass deployment harkens back to Netscape's failure when it went down the same path, says Enderle. He adds that Google has such a powerful revenue source in search and advertising that it is unlikely to follow Netscape into the grave, but today's search king is struggling to provide a solution for enterprises and governments, he says.

As Google's Kovacs alluded to, Google has agreed to compensate L.A. for what it is paying to keep the old Novell system until at least November, said Kevin Crawford, assistant general manager of the city's Information Technology Agency, in the L.A. Times story. The city is still negotiating with Google over costs that will incur after that time period.

The delays in L.A. could be a setback for Google as it pushes to convince governments and corporations to move their apps off the desktop and into the cloud. Microsoft is pushing for cloud computing too, but, unlike Google, Microsoft also has established desktop products that governments and enterprises have been using for years.

How big a setback is this for Google? It's not the end of the world, says Forrester analyst Sheri McLeish, but it is an example that Google is having trouble executing on its highly-marketed cloud strategy.

"Google is showing a lack of experience supporting the complex business requirements of a public entity moving its e-mail to the cloud," McLeish says. "It will make others hesitate to consider Google when requirements around data security and privacy are critical."

Shane O'Neill is a senior writer at Follow him on Twitter at Follow everything from on Twitter at

Copyright © 2010 IDG Communications, Inc.

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