According to Dave Girouard, Google's (Nasdaq: GOOG) president of enterprise operations, the U.S. government spends $76 billion a year on IT expenses and local governments pour on an additional $50 billion. Can you blame Google for wanting a slice of that pie?
In the ongoing effort to overthrow reigning government-grade IT shows including Microsoft (NYSE: MSFT), IBM (NYSE: IBM), and Novell (Nasdaq: NOVL), Google just announced Google Apps for Government. It's a continuation of the Google Apps for Education suite that was introduced a couple of weeks ago, only on a larger and more ambitious scale.
This time, Google's cloud-based productivity applications such as Gmail, Google Calendar, and Google Docs are approved for mid-level security clearance, making them fair game for close to 90% of all government-related work. The effort went beyond simply auditing Google's network security; these services are hosted on machines different from the ones used by free-for-all common users or even corporate accounts. All the hardware stands on American soil, and management has been dropping hints about expanding this security level both vertically (to corporations) and internationally (hosting French government accounts on servers in Marseilles or Lyon, for instance).
There are no guarantees than any government arms will sign up to actually use this freshly approved FISMA-certified alternative, although I can't help but think that the Los Angeles police department had a finger in these proceedings. LAPD wanted to move to Google services by June 30, but the deadline was missed, and Google is paying the Novell licenses that would otherwise have been obsolete by now. The hold-up? Segregating LAPD data from other accounts, mainly.
I'd be surprised to see the likes of IBM and Microsoft sitting on their hands rather than pushing cloud-computing versions of Lotus and Office out to their government clients, except that their motivation for doing it is so much smaller than Google's. It's hard to get excited about making a change when you're replacing your own old accounts -- and so much easier when you're kicking someone else's butt.
So, how much of that $126 billion annual purchasing power will trickle Google's way? Even if it's, say, a paltry $100 million or so, that would still be a not-insignificant 0.4% of Google's total sales. Scale the government accounts up, and you'd boost revenue even further. It doesn't take all that much to make a difference, especially if most of the hardware already sits in Google's plentiful data centers.
