Los Angeles has moved a step closer to replacing the city's crash-prone email system with a Google (GOOG) enterprise platform that would store data from America's second largest city on Google's servers. The switch is expected to save the city millions over the long term, but recent Gmail outages have stoked concerns -- especially among emergency personnel -- over so-called cloud computing, in which data is stored on remote servers instead of local computers.
The city's Budget and Finance committee late Monday abstained from voting on the measure, but passed it on to a full city council vote as early as next week. The development comes as Google has launched a new ad campaign touting its enterprise business, Google Apps, which includes a host of web-based software applications.
During an occasionally contentious committee hearing Monday, advocates and skeptics of cloud computing squared off over the proposed email switch, which could affect over 30,000 city workers. Google argued its product will save the city money and is safer than the current system. Critics, especially emergency services agencies, have expressed concern about the security of cloud computing.
Randi Levin, general manager of the city's Information Technology Agency, which has recommended the Google system, argued that it is a much-needed improvement from the city's current setup. "We don't even have a standardized desktop, so sometimes when we need to change something, we have to go out and visit everyone's desktop," Levin said at one point during the hearing, which was webcast. "It's not the best way to do things."
Critics of the $7.25 million contract, including Consumer Watchdog, a Santa Monica-based group, urged the committee to put sanctions into the contract that would penalize Google for any security breaches. Skeptical city council members asked for some kind of clause holding Google financially liable should the service not perform to the city's satisfaction.
Dave Girouard, president of Google's enterprise business, responded to what he called "several mischaracterizations of Google as a company."
"Information security is the most important thing we do," Girouard said. "The city did its due diligence and found that the data is more secure inside Google's servers than it is in the city's servers. There is nothing more sacred to us than the protection of users data," Girouard said.
The switch -- from Novell's (NOVL) GroupWise software to a Google enterprise platform -- has already been approved by the city council's Information Technology and General Services committee. The budget and finance committee decision to pass the measure on "without recommendation" is a sign of lukewarm support, but a full city council vote could come as early as next week. If the council takes no action by December, the contract is approved.
When asked by the LA Times whether he thought the committee's decision to abstain from voting was a good or bad sign for the contract, Girouard said, "I really don't know -- I've never been in a process like that."
Committee chairman Bernard C. Parks told the paper, "It didn't give me a warm feeling in my stomach that we should jump off this cliff together. It looks like we're going on a promise -- and it just doesn't look like, substantively, it's being supported."
As the committee met, Google was out touting its enterprise business, which Andrew Kovacs, a Google spokesperson, described as "accelerating."
"The cloud really is the future, and more and more businesses are moving online," Kovacs told DailyFinance. "It's only a matter of time until all businesses will be doing their email in the cloud."
Google charges companies $50 per user per year for the service, Kovacs said, adding that the company also has a free version with fewer features that displays advertising. Most of the adoption is coming from small- and medium-sized businesses, which can switch their systems more easily. But Google is signing up big companies as well, Kovacs said, pointing to Motorola's (MOT) handset division, which has 20,000 users.
Kovacs said Google's enterprise business, which has over 1000 employees based in Mountain View, Calif., is profitable, with hundreds of millions of dollars in revenue. The company is embarking on a rare traditional advertising campaign in the U.S., U.K., France, Canada, Japan, Australia and Singapore.
"Our value proposition is rather than running your [Microsoft] Exchange server and maintaining it and patching it and upgrading it and spending a lot of time on it at great cost, let Google take care of that for you," Kovacs said. "You save money and get the best email system in the world."
Kovacs acknowledged the concerns of cloud-computing skeptics who point to recent high-profile outages, including of Gmail itself, but defended the company's service. "When there's a large widespread outage that affects Gmail, that has a negative impact," Kovacs said. But he argued that Gmail's outages are "more transparent" than outages that afflict traditional enterprise systems. "Gmail outages occur in the public and there a lot more visibility than what you see with on-premises software," Kovacs said. "We welcome that scrutiny."
The City of Los Angeles Google-based system would cost $24.5 million over five years -- $1.5 million more than the current system.
Despite the added cost, City Administrative Officer Miguel Santana has recommended the Google-based system, saying, "the benefits that will be gained by this additional capacity justify the costs of implementing the new system."
Addressing security concerns, Santana said sensitive data will be stored in "dedicated facilities within the continental United States and managed by individuals who would be subject to high-level security clearances, including FBI fingerprint checks."
"The Police Department is satisfied that these measures will adequately address its security concerns," Santana said, according to the Contra Costa Times.
Previously, Levin, general manager of the city's Information Technology Agency, predicted that the Google-based system would save taxpayers $8 million to $30 million. Levin said that unlike the city's current GroupWise system, the Google platform won't require 16 city employees running 60 servers. She also criticized GroupWise for being "slow, limited in memory and prone to crashing."
Follow Sam Gustin, a reporter for DailyFinance, on Twitter here. Follow DailyFinance's tech coverage here.
Take the first steps to building your portfolio.View Course »