Google Misses Deadline For High-Profile L.A. Contract

Roughly nine months after Google Inc. edged out rival Microsoft Corp. (MSFT) to win a high-profile contract to supply email and collaboration software to the City of Los Angeles, the company has missed a June deadline for full implementation due to lingering security concerns.

The delay is a setback for one of Google’s most strategic businesses, and an illustration of troubles that large organizations can encounter as they shift to a so-called “cloud computing” model, in which data and applications are stored and accessed online.

Google’s (GOOG) failure to have all municipal employees outfitted with Google Apps by the June 30 deadline will have the company and its implementation partner reimbursing L.A. for extra costs, as the city continues to rely on former supplier Novell Inc. (NOVL) , according to Los Angeles Chief Technology Officer Randi Levin.

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