With the help of an Australian partner, Google is close to landing a contract to support 1.3 million students with Gmail.

The deal for student e-mail accounts at public schools and colleges in New South Wales is not quite finalized. But it is expected to be worth roughly AU$9.5 million (US$9.05 million) over a three-year period with an optional two-year extension, according to a press release from a New South Wales government agency.

SMS Management & Technology, an Australian systems integrator, will handle the implementation, which will be in place by year-end, the release said.

Beyond money, this particular type of customer win has major strategic value for Google as it attempts to wrest enterprise market share from dominant players like Microsoft, according to search analyst Stephen Arnold.

"Google's efforts to get students and academic institutions to use the company's cloud-based services like Gmail is part of the GOOG's strategy to penetrate the enterprise," Arnold wrote on his blog on Tuesday. "But it is a longer-term strategy because Google is willing to get students comfy with its products and services, let them get their jobs, and then pull Google along with them. ... The real payoff, to my way of thinking, will be the students who graduate with Google as part of their thought processes."

School-district officials could not immediately be reached Tuesday, and a Google spokesperson did not immediately respond to a number of questions, such as what type of e-mail system Gmail will replace. One report in the Australian media said the school has been using Microsoft's Outlook system.

The IDG News Service is a Network World affiliate.