Google, the GSA and the Competition
Today, the General Services Administration made the decision to replace several different versions of IBM's Lotus Notes and Domino software with Google for its own email. While we are disappointed we will not have the opportunity to meet …
Context & Ripple Effects
Google's push into hosted productivity has been running for four years by this point: it disclosed plans for its office suite and shipped the first components in August 2006, then spent 2007-2009 fighting a credibility gap — a widely cited report called Google Apps no match for MS Office, and Business Week asked what was holding the product back.
The GSA decision is the answer arriving from an unexpected quarter: not an enterprise customer but a US federal agency, replacing several versions of IBM's own Lotus Notes and Domino for its email. IBM confirmed it lost the business and said it was disappointed it would not get a meeting with the agency — a sign of how contested these procurements have become.
First-order effects
- IBM loses the GSA's email business outright, with the added sting of being refused a follow-up meeting after the award went to Google.
- Google gains a marquee federal-agency deployment of its email platform, directly answering the enterprise-readiness doubts raised in prior coverage.
Second-order effects
- Microsoft's Exchange/Office franchise now faces head-to-head public-sector competition from a suite once dismissed as unfit for serious users, forcing its response into government bids rather than just private enterprise.
- Other agencies' email refresh cycles become the visible scoreboard: each Lotus Notes replacement awarded to a cloud vendor resets expectations for the next procurement.
Third-order effects
- If agencies treat cloud-hosted email as default rather than exception, the incumbent model of on-premises messaging servers sold with professional services erodes at its most conservative customer base first.
- Government wins function as legitimacy endorsements for young SaaS products, making federal procurement a competitive weapon in the productivity-suite market rather than a side market.
The trend: Hosted productivity software is winning over institutional buyers agency by agency, converting the 2006-2009 credibility gap around Google Apps into a procurement-level contest with IBM and Microsoft.