Microsoft prices, lack of help push one firm to Google

Global manufacturer Cinram International dumps Microsoft Exchange for Google Docs

High prices and poor service forced manufacturing firm Cinram International to migrate from Microsoft Exchange to Google Docs, a move the company's vice president of IT infrastructure called "a no brainer."

"[Google] was much better," said Andrew Murrey, vice president of IT Infrastructure at Cinram. "It was a night-and-day difference."

And that could say a lot about how hard Google is pushing to get into the enterprise, despite jabs from rival Microsoft that any such effort won't succeed.

"Google already has stepped in and grabbed a foothold in the enterprise. It's been very impressive," said Brad Shimmin, an analyst with Current Analysis. "Microsoft needs to behave more like a Google. It can be a struggle to make that change. And that can be why so many companies are going to Google for these online services."

Cinram, is a global company that started out in Canada, making eight-track tapes and vinyl records about 40 years ago. The company went on to make cassettes and now is a major supplier of DVDs and Blu-ray discs. Headquartered in Toronto, it has more than 10,000 employees and 20 facilities in North America and Europe.

The problem at Cinram, though, was that its 5,000 or so knowledge workers were using Microsoft Exchange 5.5 -- an email system that was released in 1997.

It's not as though Murrey didn't want to upgrade. He just couldn't present a compelling business reason to do so.

"We could never present a business case that showed a significant cost savings," said Murrey. "We had several capitol projects to upgrade everyone to [Exchange] 2007. It was going to cost close to $2 million to move everyone across the board. It was always cost-prohibitive. If we spent the $2 million, there just wasn't the return, except for a few features here or there."

Murrey also noted that as the company grew through a series of acquisitions, it faced the question of what to do about the disparate email systems.

"Every time we acquired a company, it was running a newer version of Exchange or Lotus Notes," he said. "We'd move them to Exchange 5.5.... By March of last year, about 80% of the company was on Exchange 5.5 and the rest was on 2003 or 2007. I guess about 1% was on something totally different."

Last spring, Murrey and his team decided to move on. Since they'd been using Exchange, they went to Microsoft to see what kind of deal they could get if they migrated to Microsoft's cloud version of Exchange.

According to Murrey, Cinram couldn't get a deal, nor could they get much help.

Cinram was spending about $225 per user per year just to keep its Exchange 5.5 system running, said Murrey. That included backups and the hundreds of hours spent every year making repairs, such as dealing with file problems.

If the company had moved to the cloud version of Exchange or Exchange Online, the cost would have been $180 to $200 per seat, including implementation costs and internal labor needed to make the switch.

"That was very surprising," said Murrey. "We checked with several Microsoft vendors locally and we just weren't getting much support or help to get a fully thought-out plan for migration and what a migration would require. We were running such an old version of Exchange they said there was no native migration tool to get our data into a format that would be usable. That's what most of the cost was going to be -- getting our data moved over."

Murrey said he was recounting his woes to IT people from another company, and they recommended he consider Google Docs .

The Google technicians were helpful and eager to work with him. Google sent deployment engineers to one of Cinram's facilities and they white boarded the entire migration process and mapped out costs.

"This is a sign, perhaps, of Google maturing as a software vendor and not just a services provider," said Brad Shimmin, an analyst with Current Analysis. "They understand the need for the consultative side of this business and what customers need. It used to was a very hands-off, distant relationship and I've seen a lot of evidence in the past 12 or 18 months...that they are adding a lot of direct services and really learning to work with the customers."

As for Microsoft, Shimmin said it's never seen itself as a "a high-touch" kind of company. That may need to change, especially if there's a large cost gap between Google and Microsoft.

Moving to Google's online office apps would cost Cinram $83 per user per year. That's a big reduction from Microsoft's Exchange Online cost of $180 to $200 per user per year.

Murrey said he calculated that moving from Microsoft's client email to Google cloud applications saved the company about $3 million over three years. For example, it would have cost Cinram $1.7 million alone just to upgrade hardware to handle a transition to Exchange 2007.

"It's a no brainer, right?" said Murrey. "...We were spending $225 per user for Exchange and now we're getting new features and tools for a third of the price."

Cinram started a Google Docs pilot on July 1, 2010 with about 25 internal IT people. "We tried to blow it up and just didn't find any chinks in the armor," said Murrey.

After that, about 150 of the company's key business users were added for a second pilot that lasted about a month. That led to a full-bore migration to Google Apps, as Cinram went from facility by facility in North America. That was rapped up by the end of December, when the company began a migration of its European facilities that was completed by the end of February.

"Now we just have some clean-up, like distribution lists and shared contacts, calendars, etc.," said Murrey "We should be completely migrated by end of May.... The migration process has been excellent."

He added that Google Docs is costing Cinram about $700,000 a year right now. "Because we're still in the migration phase, there's all those expenses for moving data and everything. We're hoping to get that $700,000 number down to close to half a million a year."

And Cinram workers aren't just using Google Gmail. They're also now using a myriad of apps in the Google Docs tool box.

"When we did our cost calculations, it was just on email alone," said Murrey. "When you throw on all the other apps we get at the same price, that's just frosting on the cake."

Microsoft declined to comment on this story.

Read more about cloud computing in Computerworld's Cloud Computing Topic Center.

Copyright © 2011 IDG Communications, Inc.

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