Google didn’t bid on software deal, covering over 23,000 employees
SAN FRANCISCO -- Microsoft Corp. said it won a round in the company’s ongoing battle with Google Inc. over contracts for email and productivity software awarded by public agencies on Wednesday, as the city of San Francisco opted for the Redmond, Wash.-based company’s technology.
City officials in San Francisco, located roughly 35 miles north of Google’s Silicon Valley headquarters, announced that employees in 60 departments and agencies are scheduled to move to Microsoft’s Internet-hosted messaging and collaboration software, called Microsoft Exchange Online.
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“By moving to the Microsoft platform, we not only get immediate improvements to our system, but we gain a disaster-resilient system,” San Francisco Chief Information Officer Jon Walton said in a statement.
San Francisco said its upgrade of city email systems involves over 23,000 employees. The three-year contract with Microsoft is worth $1.2 million in its first year, with the opportunity to increase its value in the second and third years.
A Google spokesman said the company did not formally bid on the San Francisco contract.
“We’re disappointed we didn’t have an opportunity to compete for San Francisco’s business,” the Google spokesman said in a statement. “Through a competitive bid process, the majority of customers choose Google, and the rest get a great deal on their Microsoft license.”
The value of public contracts is relatively small compared to the quarterly revenue pulled in by both Microsoft and Google. Microsoft, for example, saw $16.4 billion in revenue for the period ended in March. However, each company sees the placement of their respective technologies at public agencies as a competitive advantage.
While Microsoft has long dominated the market for productivity software used by public agencies, Google has made some inroads with its Google Apps technology, which is hosted online and available for $50 per user, per year.
Microsoft has countered with its own Internet-hosted technology.
The two companies have sparred over other large, public contracts in the past, including a large implementation of email and other software for the city of Los Angeles — which Google won in 2009.
