Is Google's fight with Interior a sign of maturity?

After years of buildup and hype, cloud computing appears to have finally reached business-as-usual status in the government market. Google filed a lawsuit late last month that alleged the Interior Department unfairly favored rival Microsoft in setting requirements for bids to provide a cloud-based electronic messaging system.

Slighted vendors taking offense with how government awards lucrative contracts is a Washington tradition. However, two years ago, one would have been hard pressed to find enough cloud vendors to even fight over a contract. That is changing — and quickly. Moreover, the growing cadre of cloud providers are not coming exclusively from industry.

Google’s lawsuit contends that Interior’s Aug. 30 request for quotations was written to exclude the company’s Google Apps services by stating the system had to include the Microsoft Business Productivity Online Suite. Interior plans to have the hosted e-mail and collaboration solution serve 88,000 department users. The contract is estimated to be worth $59 million over five years.

In the lawsuit, Google officials said they met with Interior officials several times to convince the department that Google's applications were capable of handling Interior's needs and should be considered as a possible solution. Google, which filed the suit with its government-reselling partner Onix Networking, wants to block Interior from proceeding with requests for bids without first conducting a competitive procurement process.

The recent squabble comes as Google and Microsoft are both making inroads into selling their cloud services in government, typically at the expense of each other. The Energy Department's Lawrence Berkeley National Laboratory, the state of Wyoming and the city of Los Angeles have signed on with Google’s cloud services. Meanwhile, Microsoft inked a deal last month to support more than 100,000 New York City employees with the company’s cloud-based collaboration software and services.

The two companies butted heads in California over that state’s choice this summer of Microsoft’s hosted solution to upgrade the state’s 200,000-user e-mail system. In August, Google officials said they had tried to compete in the bidding process, but never formally joined the race because state officials drew up a list of requirements the company said were impossible for it to meet, reports Marc Lifsher and David Sarno for the Los Angeles Times.

Google and Microsoft are also competing for a contract to modernize and consolidate e-mail systems at the General Services Administration, reports Scott Morrison for The Wall Street Journal. In May, GSA issued a request for information for a cloud computing approach to building its new e-mail system.

However, industry isn't the only player now offering viable cloud services to government. Some agencies have created private government cloud capabilities they can provide to other agencies, a setup that often eases security concerns about turning government data over to commercial cloud providers.

The Army announced last month that it will start moving its 1.6 million e-mail users to the Defense Information Systems Agency's private cloud in 2011, reports Henry Kenyon for our sister publication Defense Systems. DISA will provide applications with its Microsoft Exchange 2010 service. The Army currently spends more than $100 per user seat annually for e-mail service, but under the new DISA partnership, that cost will drop to less than $39 per seat, said Army CIO Lt. Gen. Jeffrey Sorenson.

On the civilian side, U.S. Customs and Border Protection officials said last month they will be meeting the e-mail and online collaboration needs of the agency’s 58,000 employees with a private cloud service based in one of the Homeland Security Department’s new consolidated data centers, reports Rutrell Yasin in Government Computer News.

E-mail services are one of the hottest areas for cloud at the moment but certainly will not be the only service up for grabs in the future. GSA said it is adding a variety of commercial cloud-based infrastructure-as-a-service offerings via its Apps.gov online storefront, including data storage, virtualization and Web-hosting capabilities. Let the games begin.