Savings windfall for firm that moved from Microsoft Outlook to Gmail

Taylor Woodrow, a UK-based construction company, has switched its 1,800 employees’ e-mail from Microsoft Outlook to enterprise Gmail.

The company is also beginning to use other components of Google Apps, the suite of Web-based applications that includes, in addition to Gmail, calendar, chat, word processing, spreadsheets and wikis.

According to Rob Ramsay, Taylor Woodrow’s IT director, the company has already realized a cost savings of nearly $2 million in licensing and support costs.

According to Google, Google Apps premier edition for enterprises costs $50 per user per year. In an interview with CIO, Ramsay cited four major lessons from implementing the enterprise version of Gmail and dabbling with Google Apps.

1. Easier E-mail Maintenance

Because Gmail is hosted by Google, Taylor Woodrow doesn’t need to put the data on its own servers.

As a result, Ramsay says IT doesn’t have to spend time or money maintaining e-mail servers (which is a where some of that $2 million in savings was realized).

This means it frees up IT to work on other applications and systems. Google also handles spam and messaging security, and so eliminates another task Ramsay’s IT group had to manage.

This was especially a big deal for Taylor Woodrow, since 50 percent of the company’s e-mail user base changes every year, he says.

2. Distributed Model Helps E-mail Security

With Gmail, Ramsay says that data is distributed across many machines on the back-end of Google, a fact he believes boosts e-mail security because it means his vendor is not putting all his eggs in one basket.

“We were determined not to have a single point of attack,” Ramsay says. “If we did this [e-mail implementation] in a traditional method [on premise], there would have been a single point of attack,” he says.

3. Moving Users Out of Folders Is Hard

Gmail doesn’t look like your typical enterprise e-mail system. E-mail systems such as Lotus Notes and Microsoft Outlook operate on the principles of foldering (largely an extension of paper-based filing before the technology emerged).

With Gmail, the theory is different. A user “labels” – or essentially tags – an e-mail with terms that are pertinent to the subject of that e-mail. They can then click on those tags to view e-mails relevant to that term, and the search engine will also remember to make them relevant for future searches about that topic.

While Google – and its Gmail users – has maintained that allowing the information to be labeled and searched for is more efficient than electronically thumbing through folders, it doesn’t mean all users will want to do it right away, Ramsay says.

“People like to drag things and put them in sub sub sub folders,” he says. “People were finding that difficult culturally, so that was a challenge and we helped them [learn to use search to organize the information].”

4. Don’t Throw Away Microsoft Office Yet

Ramsay says that Taylor Woodrow has also begun experimenting with other Google Apps (that came included with the Gmail offering).

While most of his company still uses Microsoft Office on many of its employees workstations, the teams among the company have begun to use Google Docs (an online word processor in Google Apps) when they need to work on documents together in real time.

In addition, Google Docs allows you to export a Google Doc to Word (or Excel from Google Spreadsheets), making integration with the existing on premise productivity suite easy.

“Google Docs is not seen as a replacement,” Ramsay says. “We still run Office and that suite because everyone is familiar with it.”

Until now, Google primarily has worked with small or mid-sized companies – such as Taylor Woodrow – looking to capitalize on Google Apps’ low cost. (The enterprise edition rings in at $50 per user per year and its ability to enable people to collaborate in real-time on documents).

Gaining large enterprise adoption, however, hasn’t necessarily materialized.

Microsoft still dominates the productivity space. According to Techcrunch, Microsoft made $16 billion from Office in 2007. Google Apps, conversely, made about $400 million, only accounting for a small fraction of Google’s overall revenue.

On the customer page of the Google Apps website, the chief technology officer of General Electric (GE) is quoted as saying the company is considering using the web-based software, and Procter & Gamble Business Services has enrolled as charter member.

But analysts such as the Burton Group’s Guy Creese says Google Apps hasn’t caught on yet in the Fortune 500.

“Because Google Apps came out of the consumer space, there’s a bunch of things missing [for enterprises],” says Creese, who also wrote a report pondering if adopting Google Apps could be “career limiting” move for IT leaders in the enterprise space.

Among the primary features Google Apps fails to have in its portfolio, Creese notes, are sufficient offline functionality and records management for documents. While Google addressed the offline problem for its documents and spreadsheets last week, a similar function has not followed for its enterprise Gmail.

During a question and answer session after the companies unveiled their newest partnership at the Four Seasons hotel in San Francisco yesterday, Dave Girouard, vice president and general manager of Google Enterprise, and CEO Marc Benioff noted that the issue becomes less relevant as the ubiquity of wireless and other connections to the Internet continue to envelop the world.

But even if companies can get over the offline issue, the adoption of Google Apps could be a cultural challenge as much as technological one. Microsoft’s technology has pervaded the enterprise space for so long that many IT managers, as well as regular users of the Office software, have difficulty seeing how they could get off of it.

“Office is woven into line of business applications [in the enterprise],” says Tom Austin, a Gartner audience.

Austin noted another problem IT departments at large enterprises face with Google – lack of a road map for their apps.

“Does anyone get a road map from Google?” Austin asked the audience. “No. For every application Google offers, there’s a blog with it. Go read the blog, they say, and you’ll see what new features we offer. You’d never accept this from a mainline vendor.”, on the other hand, has become a trusted, mainline vendor, says Rebecca Wettemann, a vice president and analyst with Nucleus Research. She notes that has become successful at selling enterprise software “in the cloud.”

Google even somewhat conceded that it considered this street creditability in the partnership.

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