washingtonpost.com
Google, Unisys win contract to handle e-mail for GSA

By Brian Womack
(c) 2010 Bloomberg News
Wednesday, December 1, 2010; 7:15 PM

Dec. 1 (Bloomberg) -- Google Inc. will work with Unisys Corp. to handle e-mail for the U.S. General Services Administration, beating out Microsoft Corp. for the federal contract.

The $6.7 million deal will move e-mail services to off-site data centers, the GSA said today in a statement. The contract will help lower costs by 50 percent over the next five years, according to the agency.

Google, looking to get more revenue outside of its traditional search business, has branched out into communications and business software. More than 3 million businesses run Google Apps, which includes e-mail, documents and spreadsheets, offering an alternative to Microsoft's Office. The software is delivered to users via the Internet -- an approach called cloud computing.

"Cloud computing has a demonstrated track record of cost savings and efficiencies," Casey Coleman, the GSA's chief information officer, said in a statement. "With this award, GSA employees will have a modern, robust e-mail and collaboration platform that better supports our mission and our mobile workforce, and costs half as much."

Google, based in Mountain View, California, rose $8.64 to $564.35 at 4 p.m. New York time on the Nasdaq Stock Market. Microsoft's shares climbed 78 cents to $26.04.

Microsoft said it was disappointed that it wasn't chosen. The company's approach meets the stringent requirements of government, said Curt Kolcun, vice president of the U.S. public- sector unit at Redmond, Washington-based Microsoft.

"We are working with several agencies who see this as essential," he said in a statement.

© 2010 bloomberg.com