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The City Council in Los Angeles has finally approved a $7.2 million deal to use Google Apps, but security concerns are still evident with a contingency clause requiring integration provider CSC to pay penalties in the event of any breaches.

The City Administrative Officer (CAO) expects that the move will cost LA an estimated $17.6 million over five years whereas remaining with the existing on premises system would cost $23 million. "The city of Los Angeles has made a world-class decision today to support a state-of-the-art e-mail system," said Councilman Tony Cardenas who was behind the original motion to make the shift to Google. 

Despite lobbying by Microsoft, the LA City Council ended months of speculation and debate with a  decision to transfer transfer e-mail operations for its 30,000 employees to Google. The deal is significant for public sector Cloud Computing. The Obama administration in the US is a keen advocate of the Cloud model, but has met with some resistance from federal CIOs. LA becomes the largest city in the US to make the move to Google and will be watched closely as an example of good practice.

Microsoft defeat?

It's a big blow to Microsoft which reportedly paid City Hall lobbyists tens of thousands of dollars to make a case against Google, but to no avail.  "We know you have all been strenuously 'informed' by numerous parties," said Randi Levin, the city's chief technology officer, told the council.  "Unsuccessful bidders might have better spent their resources by delivering us a more qualified proposal when they had the chance."

Nonetheless  concerns were voiced by council members about how realistic the cost savings on offer would be and whether LA was being asked to make the move too early. "It's unclear if this is cutting edge or the edge of a cliff and we're about to step off," said Councilman Paul Koretz, while his colleague Bernard Parks noted:  "There's no place you can go in the world and say, 'Let me look at it'...[Google] may have a good reputation in the industry, but I think we have to identify what their industry is. And their industry, from what I can determine, is primarily ad sales."

The city plans to complete the implementation of the Google system by June and will begin with a short pilot period in which a limited number of employees will test the software. Law enforcement agencies including the Los Angeles Police Department will make the move last once any remaining security concerns have been allayed.

"We're obviously happy with how this turned out," said Dave Girouard, president of Google's enterprise division. "We're going to put a lot of energy into making sure this is a great success for the city."

The system that will be replaced is a Novel GroupWise implementation. For its part, Novell has clearly had its corporate nose put out of joint, issuing a blog statement that essentially warned that LA is making a big mistake, claiming that the city had chosen "risk without reward".  It said: "Like the LA Police department and others, we continue to doubt the economics and security of the City’s decision to move to a Google system. The City Council was presented with clear evidence that Google posed a very significant risk to the security of City and citizen data, much of it highly confidential. In addition, independent financial data showed that the new system will actually cost more, not less.

"With the City facing a massive budget deficit, the speculated budget benefits of switching to this untested application are enticing, but as a recent independent Los Angeles City Administrative Officer report has stated, the proposed system under consideration will actually cost taxpayers an additional $1.5 million in the first year. There are significant costs to migrating, training and securing Google Apps."