Google is close to landing a contract to support 1.3 million students with Gmail.

The deal for student email accounts at public schools and colleges in New South Wales is not quite finalised. But it is expected to be worth roughly AU$9.5 million (£4.5m) 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. "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."