In a potential breakthrough for Google, GM signs deal for Google Apps

Despite a stumble with its latest Gmail app for the iPhone and iPad, Google (Nasdaq: GOOG) is continuing to push deeper into the enterprise email and collaboration space, signing a deal with General Motors that could put its Google Apps product in the hands of the giant automaker's 100,000 employees.

GM won't sign a final deal until Google meets certain requirements with the software, according to the Wall Street Journal; GM declined to confirm the deal.

Google Apps--Gmail, Google Docs and the Google+ social networking platform and its video calling component--in the form of Google Apps for Government, has been gaining traction with city, state and federal governments looking for cost savings. The software helps contain costs and reduce capex.

The State of Wyoming, City of Los Angeles and the federal government's General Services Administration are among the biggest wins for Google Apps.

Research firm Gartner has said Gmail, which currently has only a one-percent share of the enterprise email market, poses a significant threat to Microsoft's (Nasdaq: MSFT) Entourage software.

GM currently uses Lotus Notes, an IBM product. Both Microsoft and Google have targeted the company's email and collaboration business. A deal would give Google, which has made inroads with SMBs as well as governments, a high-profile customer in the enterprise space.

IDC analyst Al Hilwa said landing GM would be a "feather in Google's cap" and a "credibility boost for cloud services for large companies."

Typically, Google charges businesses with more than 10 users $50 per year per user, but that pricing structure may have gone out the window in its attempt to win GM. Hilwa said Google may be offering a discount of up to 50 percent.

For more:
- see this Wall Street Journal article

Related articles:
Wyoming opts for Google Apps for Government
Gartner: Gmail to challenge Microsoft for enterprise email dominance
Fed's General Services Administration transitions to the cloud with Google Apps