Google Inc. has missed the deadline on its high-profile contract to take over Los Angeles' e-mail system, leaving nearly 20,000 city employees on an aging system that the city is paying the Internet search giant $7.25 million to replace.
The delay marks a significant setback for Google's push to enter the lucrative business of shifting companies and governments to computer systems that reside online. The contract with the city is considered a marquee deal and is being closely watched by other governments looking to move to "cloud computing."
Since winning a battle for the contract with rival Microsoft Corp. last year, Google has run into roadblocks at the Los Angeles Police Department, which has strict rules about the way its data is secured.
Until Google can address those concerns, city officials say, LAPD will continue to use the old system — in effect forcing the city to pay for both the new and old e-mail programs at an additional cost that could rise to more than $400,000 over the next year.
Google, which had agreed to implement its e-mail system by June 30, has agreed to pick up the tab for the old system until at least November, said Kevin Crawford, assistant general manager of the city's Information Technology Agency. The city is still negotiating with Google over costs incurred thereafter.
The delay has infuriated some council members who said they thought they had voted for a lower-cost new e-mail system that would solve more problems than it would create.
"Google comes in with this sweetheart deal that was supposed to be state of the art — supposed to make wonders — and obviously they haven't performed," Councilman Dennis Zine said in a committee meeting last week.
Maggie Goodrich, the LAPD's chief information officer, told council members that the security requirements her department needed had not been delivered.
"Whose fault was that?" Zine asked.
"In my opinion, it was Google that didn't deliver the security requirements," Goodrich said.
In the meeting, council members grilled a Google executive about the delays, many of which involve problems putting security mechanisms in place to protect sensitive LAPD data. Council members and LAPD officials said that the requirements were clear from the outset.
Google executive Jocelyn Ding said the company was committed to fulfilling its contract but admitted that it had missed "some details" in the original requirements.
Last October, Los Angeles became the largest city in the nation to commit to Google's vision of online computing.
Despite a flurry of lobbying by archrival Microsoft, the City Council agreed to shut down the city's in-house messaging system and transfer e-mail operations for its 30,000 employees to Google's nationwide network of servers.
The decision was significant because other major cities and large corporations are considering whether to stay with older e-mail programs, such as Microsoft's Outlook, or to embrace the "cloud" model championed by Google.
In cloud computing, applications run on remote servers rather than on workers' desktop machines.