On Wednesday, Lt. Gov. and gubernatorial hopeful Diane Denish unveiled several proposals designed to streamline government and save money. Included in a press release was the suggestion that state government consider switching “from current systems to Google Apps,” which “could generate as much as $1.9 million in recurring savings.”

Google itself spoke about using Google Apps for government in September. Google Apps is part of the online marketplace Apps.gov, which allows federal agencies to purchase IT services from a variety of vendors.

Google, however, is going a step further. From the above-linked blog post:

Today, we’re excited to announce our intent to create a government cloud, which we expect to become operational in 2010. Offering the same services and features as our existing commercial cloud (such as Google Apps), this dedicated environment within existing Google facilities in the US will serve the unique needs of US federal, state, and local governments. It is similar to a “Community Cloud” as defined by the National Institute for Science and Technology. The government cloud will allow Google to manage and meet additional government policy requirements beyond FISMA.

One New Mexico governmental agency has already opted to use Google Apps instead of Microsoft Exchange — the New Mexico State Attorney General’s office.

[Attorney General's office CIO James] Ferreira investigated his options, searching for something with ample inbox storage quotas, easy backup, data redundancy, and low maintenance. Google Apps Premier Edition emerged as the clear winner. It offered 25GB inboxes, anti-virus/antispam and disaster recovery – all at $50 per user per year.

Last week, the city of Los Angeles, the second-largest in the nation, went with Google to replace its governmental e-mail system.

One reason Google got the contract? Cost.

The [Los Angeles] City Administrative Officer (CAO) expects “Going Google,” to borrow Google’s marketing catch-phrase, will cost the City an estimated $17.6 million over five years. Remaining with Novell, the CAO estimated, would cost $23 million.

Google claims that Google Apps have over 20 million users (a claim that Microsoft questions), so Denish’s proposal isn’t exactly groundbreaking.