Corporate e-mail in the cloud: Google vs. Microsoft

Some large enterprises are seriously considering jumping from Exchange to Gmail, or already have. Here's why.

E-mail is the third rail of enterprise IT operations. You can mess up elsewhere, but bring down people's e-mail and you'll start getting irate calls literally in seconds.

Manesh Patel knows those risks well, but that didn't stop the senior vice president and CIO at Sanmina-SCI Corp. from stepping off the Microsoft Outlook/Exchange platform and moving the company's 16,000 users into Google's cloud -- thereby running the risk of interrupting users' e-mail, even if just temporarily, in the process. The cost savings were simply too good to pass up.

Two years ago, the San Jose-based contract manufacturer relied on stable, up-to-date versions of Microsoft Corp.'s Outlook and Exchange Server to handle its e-mail needs. Then, after a lengthy analysis and pilot, Sanmina-SCI shut down its 100 Exchange servers, traded Outlook for a browser as the primary e-mail client and migrated all of its e-mail users worldwide onto Google Apps for Business suite. This cloud-based service now delivers Google Inc.'s Gmail e-mail offering, plus calendaring and contact management services to Sanmina-SCI's workers.

The company completed the project last December.

Why fix something that wasn't broken? "A lot of people thought I was crazy," Patel admits, but the operational cost savings were just too big to ignore. By moving from an on-premises Exchange architecture to Google Apps for Business Premier Edition, Patel cut costs by more than $1.9 million a year.

Now that its suite of tools has established a foothold among consumers, educational institutions and small businesses, Google is focusing on large businesses -- and it's targeting Exchange users in particular. Google claims to have 1.75 million business user accounts. There's no data available on how many of those customers, if any, switched to Google Apps from Exchange, but the general belief is that most probably are small and midsize business users who may not have come from an Exchange environment.

To attract even larger business accounts, Google has received SAS 70 Type II certification and now offers -- either directly or through partners -- a range of enterprise-friendly options, including tools for automating Exchange migration, integration with LDAP and Active Directory, and add-ons such as support for BlackBerry users and Postini services for content filtering and message archiving.

Another feature, one recently incorporated from the company's testing lab, allows for delegation, where an executive can give an administrator control over his messages, much like Exchange already offers.

There are a few differences between Gmail for Business and Exchange's features, however. For example, voice and video chat are integrated into the mail view. Google's core suite also promises easy ad-hoc collaboration between its Gmail, Docs, Calendar, Groups, Sites and Video applications.

"There's lots more to come in 2010," says Rajen Sheth, senior product manager for Google Apps. "We're hardening the services by increasing reliability from 99.9% to 99.99% availability, and providing more tools for administrators to manage their information in the cloud. We're making the platform more flexible, and helping third parties build powerful applications on top of our own."

Most large businesses have yet to take e-mail into the cloud, but interest is rising, says Ted Schadler, an analyst at Forrester Research Inc. The nascent trend has the full attention of Microsoft, which has been rapidly evolving its own service, Exchange Online. [See related story.]

The Google proposition

Moving from an on-premises model to a cloud-based model presents its own concerns; moving at the same time to a new e-mail platform with an entirely different user interface and feature set is an even bigger step. Still, from Patel's perspective, it made good sense to migrate from an enterprise-class on-premises e-mail system like Exchange onto the cloud-based Gmail architecture, despite Gmail's roots as a free, consumer-based application.

Not only does Google Apps for Business cost less than an on-premises Exchange Server system, but it has a "high level of functionality -- 90% to 95% of what we were looking for," Patel says.

Generally speaking, moving to the cloud relieves IT of the responsibility of maintaining and operating an e-mail infrastructure. And it allows for more rapid innovation by developers, who can roll out new features as soon as they're ready. Users don't have to wait for the next service pack to see updates and they don't have to wait three years for major new features to appear in the next release. "When you look at the pace of innovation, this is where the cloud really starts to shine," says Forrester's Schadler.

But some IT executives who have explored using Google Apps say the cost savings can disappear if you run an extremely efficient on-premises Exchange environment. Others point out that cost isn't everything.

"It's a huge effort to ask people to learn something different -- even if it's for a better price point," says Ce Cole Dillon, CIO at Chicago State University, which recently moved everyone to Google Apps but then decided to move some staffers back onto Exchange. Finally, some users report that certain features in Google Apps aren't as sophisticated as those offered in Outlook and Exchange, particularly when it comes to calendaring -- an assertion that Google vigorously disputes.

A quick rollout

Patel succeeded with the transition by getting executive buy-in early and doing the rollout very quickly, over a 90-day period, rather than going through a prolonged migration process. He did, however, face some resistance to change. The Gmail interface, for example, organizes messages with tags instead of folders, and while accessing Gmail using a browser as the local client software worked better than Outlook for some tasks, it wasn't nearly as robust for others, such as dragging and dropping. He expects those differences to go away in the next 12 months as browsers begin to support new features in the emerging HTML 5 specification.

Patel sold the project by touting the potential cost savings and the benefits of moving from a fixed cost infrastructure to a variable cost service. "The financial guys loved that," he says.

But he also had other motives. One was to tap into the flexibility and continuous innovation that Google's cloud-based model offers. The other was to develop a "culture of collaboration" that would support ad-hoc, informal teams of customers and business partners. Google Apps, with an array of services ranging from Gmail to Google Docs, was well suited to the task, Patel says.

Automotive parts supplier Valeo Inc. is about one-third of the way through moving 30,000 users to Google Apps for Business, from IBM's Lotus Notes. CIO Francois Blanc says his team considered offerings from IBM, Microsoft and Google before making final decision. "In the cloud area, I see a leader and a follower, and the leader is Google," he says.

Blanc readily admits that Exchange, which he also considered to replace Notes, offers more sophisticated features in some respects -- but that's why he chose Google Apps. His users found many features in Notes "overly complicated and so didn't use them much." This time, he says, "we chose simplicity." But users do miss some features, such as the ability to make sure that an assistant who has access to an executive's in-box can't read the executive's confidential messages. "It was a small feature, but appreciated," he says.

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