When the city of Los Angeles wanted to save money by eliminating its dedicated servers used for e-mail and collaboration programs, it didn’t look to Microsoft. It turned to Google. The search giant’s cloud-based Apps suite currently allows more than two million companies to leverage the Big G’s servers for Web-based e-mail and office productivity programs. Plus, this option costs only a fraction of traditional hosted solutions, and it doesn’t require a team of IT professionals to maintain. But do security concerns and Google’s much-publicized outages make this option too big of a risk?
The Google Apps Package
Google Apps is a service for using custom domain names with a package of Google products, which includes Gmail, Google Calendar, Google Docs, Google Groups, Google Sites, and Google Talk. The Standard Edition is free for up to 50 users and comes with approximately 8GB of e-mail storage, but tech support hours are limited. However, the Premier Edition costs $50 per user annually and includes 25GB of e-mail storage, 24/7 tech support, Google Video (a private company-branded version of YouTube), and a 99.9 percent uptime guarantee.
In comparison, Microsoft Exchange Hosted Services prices begin at $1.75 per user per month and go as high as $4.50, depending on the features needed. This package includes Exchange Outlook Web Access, Active Directory, smart phone support, and 1GB of storage per user. Microsoft’s Business Productivity Online Standard Suite, a set of messaging and collaboration solutions hosted by Microsoft (consisting of Exchange Online, Office Communications Online, Office Live Meeting, and SharePoint Online), starts at $10 per user monthly. It includes a standard 5GB of data per user, along with support for Windows Mobile 6 and other Exchange ActiveSync devices.
On paper, then, Google Apps is one of the most cost-friendly solutions on the market. It also provides lots of flexibility, allowing companies to easily grow or contract IT needs.
“When buying and managing your own IT infrastructure, expenses include both the CAPEX [capital expenditure] costs for hardware, software, building costs; and the variablized operational cost, which includes the amortized interest payments on IT hardware and software capital,” said Dan Shey, practice director of mobile devices for ABI Research. “Using cloud services for all your IT needs results in only a variablized cost based on the cloud services’ fees, which are typically per use by time or in use of computer memory units.”
Switching to Google Apps requires that a company verify ownership of a domain by uploading a small HTML file to their server, creating a CNAME record, or modifying MX records. The migration typically takes 48 hours to complete; once in place, it eliminates the need for a fleet of IT professionals to keep your business up and running. Unlike traditional hosted services, Google says that it takes care of much of the heavy lifting.
The Benefits of Switching
Millions of companies are currently using Google Apps (including such large enterprises as Motorola), but one of the most high-profile converts is the second largest city in the United States. Los Angeles switched to the service in December 2009 in an effort to find a product that would address its $550 million deficit and offer ease of use. (The migration is currently in pilot, and should be complete by early June.) With more than 30,000 employees and 34,000 e-mail addresses to consider, city representatives met with more than a dozen vendors (including Microsoft and Yahoo) before selecting Google based on the features and price.
“We were on Novell Groupwise, but the system hadn’t been kept up,” said Kevin Crawford, assistant general manager for the City of Los Angeles. “We looked into upgrading to Exchange, but decided on a hosted solution.”
By switching to Google Apps, the City of Los Angles gained improved collaboration, tighter security, easier remote access, and 25 times the e-mail storage than what its Linux-based predecessor offered. The biggest benefit was the cost savings: the city expects approximately $5.5 million in hard savings over the course of its five-year contract, in addition to more than $30 million in soft savings. For example, moving to Google Apps freed up nearly 100 servers that were previously used for e-mail, which will lower the government body’s electricity bill by nearly $750,000 during the next half-decade.
Google has also worked hard to ensure the city’s employees can access company accounts through their smart phones. “We made it easy for them to get push e-mail on their BlackBerrys, so the native e-mail and calendar work seamlessly with Google Apps,” said Andrew Kovacs, a spokesperson for Google.
Moving to the cloud also produces a secondary cost-saving effect in the realm of software. “Another advantage of the cloud is [that] many companies are offering application development in the cloud—again, an economic benefit of not having to buy your own software development platforms,” said ABI Research’s Shey.