Why Microsoft and Google Are Fighting Over Uncle Sam

Microsoft (s msft) today accused Google (s goog) of lying about its Google Apps for Government offering being certified for use by federal agencies, which is just the latest salvo in an ongoing war to be the premier provider in the lucrative market for cloud-based collaboration tools.
In a blog post this morning, Microsoft Corporate VP and Deputy General Counsel David Howard wrote about the Department of Justice rebuking Google’s position that Google Apps for Government is certified under the Federal Information Security Management Act (FISMA), despite Google’s public claims that the product is FISMA-compliant. The DOJ’s opinion is part of ongoing litigation brought against Microsoft by Google after the Department of the Interior allegedly chose Microsoft’s Business Productivity Online Suite (BPOS) without even considering Google Apps for Government. Don’t let the Beltway-insider feel of all this fool you into thinking this is just political theater with a Silicon Valley twist, though. It’s all about making money. Lots of it.
There’s a lot of money to be made selling cloud-based collaborations services such as email and document sharing, and Microsoft and Google have been fighting tooth and nail in the space for more than a year already. The federal government, actually, is just one part of the story, albeit one with an IT budget approaching $80 billion and a CIO dead set on moving large numbers of government workloads to cloud-based resources. But the Microsoft and Google public-relations machines speed into overdrive every time Google wins a deal with the City of Los Angeles or Microsoft woos New York City.
They’re able to fight over such big deals because organizations actually are interested in moving applications to the cloud, and email is an ideal target: it’s pricey enough to justify the effort and reap the cost savings, but not mission-critical enough to make the move unfeasible from a security standpoint.
The battle thus far hasn’t been pretty either, with Google showing particular savvy in playing hardball on legacy vendors’ standard terms. Aside from the litigation that’s the focal point of today’s claims, Google also recently released a product called Google Message Continuity, which backs up Microsoft Exchange users’ accounts and lets them access their email, calendars and contacts if their Exchange Server goes down. Of course, it also makes it very easy for users to just make the transition to Google Apps if they so please.
IBM (s ibm) also is a player in this space with LotusLive, as is VMware (s vmw) with Zimbra. Cisco (s csco) tried its hand with collaboration applications, but recently backed out of the business after realizing it was too far behind its competitors. No doubt they’re all now fighting to get business from Cisco’s former customers that are now having to look elsewhere.
The gist of today’s skirmish, from Microsoft’s perspective, is that Google achieved FISMA certification for Google Apps Premier specifically within the General Services Administration, not across the government as a whole, and certainly not for Google Apps for Business Government, which is a different product. Google’s David Mihalchik responded to Howard’s lengthy post with the following official statement, suggesting that Microsoft BPOS isn’t certified under FISMA, either:

This case is about the Department of Interior limiting its proposal to one product that isn’t even FISMA certified, so this question is unrelated to our request that DOI allow for a true competition when selecting its technology providers.
Even so, we did not mislead the court or our customers. Google Apps received a FISMA security authorization from the General Services Administration in July 2010.  Google Apps for Government is the same system with enhanced security controls that go beyond FISMA requirements. As planned we’re working with GSA to continuously update our documentation with these and other additional enhancements.

Mihalchik is right that FISMA certification might not be the core issue in the litigation, but that hardly matters in the court of public opinion, where reputation sometimes matters more than specific facts. Of course, it’s arguable that if Google didn’t want to get into this sort of sniping with Microsoft, it wouldn’t have filed the lawsuit in the first place.
But this is big business, where every victory — customer, PR or legal — matters, and you can’t win if you don’t play the game. This particular issue of FISMA certification and even the lawsuit from which it stems are just today’s story in what will be a long-running back-and-forth between Microsoft, Google and whoever else wants in on cloud-based collaboration tools.
Image courtesy of Flickr user iChaz.