General Motors deal would be huge coup for Google Apps

General Motors (s GM) is reportedly thinking of deploying Google Apps (s GOOG) to 100,000 or more of its users. If the automaker does commit to Google Apps, it would be a huge validation of Google’s productivity applications in the enterprise.

A big GM contract would be especially sweet for Google because GM is a huge Microsoft (s MSFT) shop, and Google is fighting Micrososft in a protracted, multi-front battle for the minds and wallets of consumers and business users.

A major corporate win now for Google Apps would be especially welcome to Google. Google Apps takes direct aim at the Microsoft Office juggernaut, and Google claims many business customers, but generally it has had a hard time penetrating really big accounts where Office is the standard.

And, one of Google Apps’ biggest reference accounts, the city of Los Angeles, has become problematic for the vendor. The Los Angeles Police Department, which was covered by the city’s two-year-old contract, is refusing to deploy Google Apps, citing security concerns. Google is paying for the LAPD to keep using Novell Groupwise.

Last night, the Wall Street Journal, (s nws) citing unnamed sources, reported that Google and GM signed a deal to provide more than 100,000 users with Google Apps. But the same story quoted a GM spokeswoman saying the company has not decided to deploy Google Apps but always evaluates its IT options. A GM spokesman just told me pretty much the same thing–that the company continually looks the latest and greatest technologies but does not discuss contracts. He did say, however, that GM recently rolled out Windows 7 to some 85,000 or so desktops.

Google Apps is an important part of Google’s push beyond Internet search and into corporate accounts. Last April, Google Enterprise chief David Girouard talked about how the company is refining its App Engine Platform-as-a-Service and other offerings to appeal to businesses as well as consumers.

Microsoft to Google: This means war

For anyone who has followed the industry for any length of time, what’s interesting here is that with Google Apps, Google is doing to Microsoft what Microsoft did to so many of its early rivals: Come in late with a cheaper, less-than-fully featured competitive product and chip, chip, chip away at the market leader.

Microsoft isn’t letting this go unchallenged. In response to Google Apps (and to the SaaS phenomenon in general) Microsoft is offering hosted Microsoft Office 365, a “cloud-inflected” version of Office.

The battle rages on many fronts. Microsoft has spent billions on Bing in hopes of challenging Google’s search dominance. Further, it has repeatedly challenged Google’s claims that Google Apps earned federal FISMA security certification. FISMA stands for the Federal Information Security Management Act, and compliance is a requisite for any federal government deployments. And, with Windows Phone 7, Microsoft finally appears to have a viable challenger to Google-backed Android phones.

Whether or not GM sticks with Office or goes with Google Apps — or mixes and matches the applications in-house — this heated battle will continue.

To learn more about the next generation of enterprise computing, from mix-and-match cloud and desktop apps to which up-and-comers will be taking over for long-time incumbents, check out our upcoming event, GigaOM RoadMap. There are still a few tickets left.