Rain stops play – for Microsoft

29th October 2009

News yesterday that Los Angeles City Council members have “tentatively approved” a multimillion dollar proposal to use Google’s hosted applications for more than 30,000 city employees is a feather in the cap for advocates of Cloud computing.

The move is a startling development and a vote of confidence for a technology that allows companies to leverage low cost office-style applications for e-mail,word processing, spreadsheets, presentations and other internet services over the web.  But of course the supplier is not Microsoft in this instance and Redmond must be licking its wounds after such a high profile decision.

The Council apparently voted unanimously for the $7.2 million deal with contractor Computer Sciences Corp (CSC). Unconfirmed reports suggest that the deal is contingent on CSC agreeing to pay a preset penalty if a security breach occurs.   Security concerns around email had in earlier discussions been raised by the LA police department and others.

The deal brings into sharp relief the battle between cloud computing on the one hand and the traditional desktop based office applications on which Microsoft has built its reputation.  The award of a contract on such a large scale by a large government organisation not only legitimises the cloud concept but shows that security concerns that have dogged cloud computing can be overcome.