By John Letzing
Microsoft Corp. (MSFT) has won a software contract with a county
in the heart of Silicon Valley home to Google Inc. (GOOG), further
stirring the ongoing rivalry between leading technology
companies.
While Google initially bid for the email and collaboration
software contract with the county of Santa Clara, the county
ultimately opted to focus only on technology from Seattle-based
Microsoft--in order to keep costs low and remain compatible with
the security requirements of law-enforcement agencies, according to
county Chief Information Officer Joyce Wing.
The county has been using a mixture of email technologies from
Microsoft and other firms, Ms. Wing said. It hopes to start moving
to the new Microsoft technology in October, she said.
The contract covers 15,000 employees and is worth $3.6 million
annually, though Ms. Wing says that figure may be reduced in the
future.
She said she sees no irony in the county opting for technology
from Microsoft rather than Google, which is headquartered in
Mountain View, Calif.
"Google has a very good product," she said, but the county
ultimately realized it would have to retain at least some Microsoft
technology in order remain compatible with other government offices
and law-enforcement agencies. "If I went the Google way I would've
still had to pay for the Microsoft products as well, and that
would've been additional costs," Ms. Wing said.
A Google spokesman said the company was ultimately unable to
compete for the contract, after the county's focus shifted solely
to Microsoft technology.
"We believe fair and open procurement processes save government
agencies and taxpayers millions of dollars a year and result in
better services," the spokesman said.
The tools to be made available in the County of Santa Clara
include Microsoft's Office 365 software, an Internet-based version
of its word processing and other products.
Google has promoted the use of Google Apps, a suite of
Internet-based word processing and other tools. The company has
touted a number of government agency customer wins for Google Apps,
including the cities of Orlando and St. Louis, as well as the
Department of the Interior and General Services Administration.
While Google has created increased competition, Microsoft is
still able to rely on its Office software business as a growing
source of profit.
For the quarter ended in June, Microsoft reported that operating
income for the Business Division that includes Office rose to
roughly $4.1 billion from $3.8 billion in the same period a year
earlier.
Write to John Letzing at john.letzing@dowjones.com
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