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The General Services Administration is moving all 15,000 of its employees to Gmail and Google Apps, making it the first federal agency to move all its employees to e-mail in the cloud system.Both companies have sniped back and forth about each other’s cloud solutions, and the battle recently got ugly as Google sued the Department of Interior for considering only Microsoft’s cloud services. This tme, Google was the winner.
It’s going to take a while for Google to make Apps into its next big business, though: at the standard government price of $50 per user per year, the deal will amount to less than $1 million a year in revenue for Google. The published value of the entire contract, which will be delivered by systems integrator Unisys, is $6.7 million over five years.
Although it’s peanuts today, the move to the cloud presents big opportunities for both companies, as well as competitors like Cisco, Rackspace, and Salesforce.com. According to a recent survey by cloud provider Appirio, nearly 70% of IT decision makers at 150 large U.S. companies believe that the majority of their data and applications will move to the cloud in the next three years.