Google has won the first contract to move a US federal agency completely to cloud services with its Apps for Government suite.

The US General Services Administration (GSA) opened the contract to replace its in-house Lotus Notes and Domino systems.

Microsoft pitched its Office suite and IBM was also on the shortlist, but a group comprising Unisys, Google, Tempus Nova and Acumen Solutions won the $6.7m (£4.2m) contract.

"Cloud computing has a demonstrated track record of cost savings and efficiencies," said GSA chief information officer Casey Coleman.

"With this award, GSA employees will have a modern, robust email and collaboration platform that better supports our mission and our mobile workforce, and costs half as much."

The move will save the GSA around $15m (£9.5m) over the five-year contract, according to Coleman. Around 17,000 staff will use the new service as part of the first federal agency to move email entirely onto the cloud.

The announcement has caused more than a hint of sour grapes at Microsoft. Tom Rizzo, senior director of SharePoint at Microsoft, highlighted the failures, as he sees them, in Google's offering.

"It's no secret that large public sector organisations have consistently valued Microsoft's cloud offerings not only because of our deep understanding of enterprise organisations, but for their ease of use, security and privacy capabilities," he wrote in a blog post.

"Regardless of how organisations are thinking about the cloud, Microsoft provides a choice for their productivity needs: on premises, in the cloud or as a hosted solution. Google does not offer any such choice."

The news comes just at the right time for Google. The company lost a major New York cloud contract to Microsoft in October, and resorted to legal action last month after being excluded from a shortlist for other government contacts.

Google Apps for Government has a separate physical infrastructure and improved security in order to meet contract standards.

The UK government is moving to cloud services, and Google could be pitching for similar deals across the Atlantic.

Source: http://www.v3.co.uk/v3/news/2273654/google-apps-government-gsa