When the Los Angeles City Council voted unanimously late last year to outsource its e-mail system to Google Inc., the ripples were felt in government agencies as well as private-sector organizations across the country. After all, if the second-largest city in America could make a commitment to a so-called cloud computing solution, why couldn't everyone else?

The L.A. contract is for $7.25 million over five years and would encompass all 30,000 city employees. For comparison's sake, the total number of employees in all four counties in Hawaii is roughly 18,000 (uhero.prognoz.com).

Basically, the way it works is that all e-mail boxes will be hosted at a Google facility and accessed over the Internet by city employees. All installation, configuration, support and maintenance will be done by Google. Sounds great, right? What could possibly go wrong?

Well, security is a key concern. As with most cloud computing solutions, the data is owned by the customer. Google touts its technical security solution, which industry experts concede is probably better than what most organizations can accomplish on their own. Any cloud computing vendor has to emphasize security as even the most manini of breaches could end their business. Further, Google has agreed to as yet undisclosed penalties in case of a security breach.

Still, security and privacy are a concern, especially with the police department and city attorney's office.

What about cost? Cloud computing is pitched as being a cost saver. The end-user organization typically does not need to buy or maintain any hardware, software or telecom lines, save perhaps an Internet connection, PC and browser.

Usually, though, the unfortunate truth is that no matter how many analyses are done beforehand, actual costs cannot be determined until well after the contract kicks in. We've seen several IT engagements with Hawaii government agencies where the vendor initially presented a low cost (and associated low level of service). Change orders then get added to improve the level of service, and voila, costs are through the roof.

Interestingly, L.A. will be using a version of Google's e-mail product that is designed for corporate and government enterprise customers. Google claims that the enterprise version includes additional features such as electronic discovery, archiving and disaster recovery functions.

The jury is still out as to whether this endeavor will be a success. But if Google can be successful, this will be a major milestone in the growth of cloud computing.