Los Angeles is replacing GroupWise with Google Apps.
The LA City Council Tuesday approved a multi-million dollar deal that will see the City of Los Angeles' 30,000 employees rely on Google Apps for e-mail and other Internet services.
However, while most are labeling the $7.2 million deal as a big win for Google, a significant amount of people are talking about what the unanimous vote means for Microsoft. The AP reports that the Council chose Google's offer over competing bids from Microsoft and more than a dozen other technology firms.
Analyst Rob Enderle spoke to the AP about Microsoft's failure to seize the Los Angeles contract, detailing that the loss represented a setback in its efforts to compete with Google for Web-based e-mail and other applications.
"Losing something of this size has to be really painful," Enderle said. "It's not the death knell for them, but it's a big red flag."
Then again, Microsoft isn't the only one suffering because of LA's decision to go Google. The new deal ends a 7-year agreement with Novell Inc. City workers complained that the company's GroupWise software was slow and crash-prone. According to the AP, Novell's senior VP said during the Council hearing that many city departments were not using the most recent version of GroupWise and reiterated an offer to provide additional services for free but alas, it was not to be.
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