That collective cheer you hear coming from the cloud sector is because the cloud bagged an elephant: A story originally reported by The Wall Street Journal states that auto manufacturer General Motors, which employes more than 100,000 people, has signed on with Google to use Google Apps for cloud-based e-mail and other applications.

For Google, a successful deal with a giant like GM could put Google Apps on a much larger map, and entice other big enterprises to make the jump to the cloud. A story on Forbes.com points out the limitations that have kept large corporations out of the cloud to date:

The main perceived hurdle that has kept large, blue-chip companies like GM away from cloud-software is security. Such companies have a vast amount of sensitive data, and the mind-set until now has been to avoid exposing this information in any way to an online medium. Consequently, the challenge for Google would be two-fold. Firstly, all privacy concerns that might exist within GM management must be put to rest without compromise. The second and more gradual action would be ease in employees to using Google Apps, given the present stickiness they would have developed with IBM’s Lotus Notes, the current proprietary software in place. Google might also need to do some heavy customization to its existing format of Google Docs to make it more inclined towards corporate usage, considering that presently such software has been used on more informal levels.

A story on GigaOm, meanwhile, cites Google Apps’ shortcomings in other large deployments.

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.

Assuming success, the GM deal certainly is a wake-up call for Microsoft, whose cloud-based Office 365 offering is a direct competitor to Google Apps.