Google has released new and improved Google apps for use by the government. It has a better security features and is built on the enterprise flavor of Google apps. Google has recently received the FISMA (Federal Information Security Management Act) certification, which lets it store sensitive government data.
FISMA as described by Wikipedia:
The act recognized the importance of information security to the economic and national security interests of the United States. The act requires each federal agency to develop, document, and implement an agency-wide program to provide information security for the information and information systems that support the operations and assets of the agency, including those provided or managed by another agency, contractor, or other source.
The servers used to store this data are separate from the servers used to store other data and are geographically located inside the United States. Google has been a strong contender for FISMA and only has Microsoft as a potential competitor. Google aims to provide cost effective and safe solutions to putting data in the cloud with this latest offering.
The government has been skeptic about having a third party control sensitive data. However, it is showing more acceptances for this now. FISMA goes a long way in developing this level of trust and will opened a new war-zone for enterprise solutions to provide services to the Government.