Why Enterprises Are Moving to Google Apps, Gmail

Though it started selling software to universities and small businesses, Google has pervaded more large businesses during the past year with Google Apps, the company’s suite of messaging and productivity software. Analysts say Google Enterprise, the division of Google that runs Apps, has added many features to the product that make it more attractive to enterprise IT departments.

JohnsonDiversey, a company that sells commercial cleaning products, is Google’s most recent win. It moved its 12,000 employees over to the premier edition of Google Apps, which includes Gmail, instant messaging, documents and spreadsheets (among other apps) for $50 per user per year.

“E-mail is critical to our work, but we’re trying to simplify IT,” says Brent Hoag, JohnsonDiversey’s IT director. “We want less infrastructure to maintain, and Google [Gmail] allows us to do that.”

Because Google hosts Google Apps in its own data centers, companies that buy the product do not need to maintain servers in-house (a process widely known as cloud computing or software as a service). According to Hoag, JohnsonDiversey had been managing several application servers and two different mail systems prior to moving to Gmail.

Google Apps has matured substantially during the past year with more enterprise features. Among them are the ability for IT groups to have greater control for what new features are rolled out to their users. Productivity applications, such as Google Docs & Spreadsheets, have also seen gradual improvements. Google baked in more advanced features, such as macros for spreadsheets. Google Apps also work better with BlackBerry e-mail, as it created a connector to BlackBerry Enterprise Server.

Perhaps most significantly, at a Google Apps CIO roundtable event in San Francisco this week, Google announced that enterprise users of Google Apps could access Gmail through an Outlook client. The company hopes it will quell the protests by users who have become tethered to the desktop app and who, as a result, have sometimes hindered enterprise adoption of Google Apps.

“For me, it eliminates the last hurdle or mindset for letting go of [Microsoft] Exchange or the Exchange mentality,” said Bob Rudy, vice president and CIO of Avago, a semiconductor company that moved its employees over to Google Apps, during the event. “This will help with adoption.”

Google’s addition of the ability to access Gmail via Outlook surprised some analysts. A year ago, such a move would have been unheard of since Google was offering such a stark contrast to the Microsoft enterprise environment. But according to Google executives and analysts who follow Google’s enterprise push, the decision came from hearing the needs of current and prospective customers.

“Google listened hard to what enterprises wanted, and they delivered much of that,” says Matt Cain, a Gartner analyst. “They have developed true proof-points, where companies are saying that they have been successful. Now we’re seeing more true enterprise interest in Google, rather than just curiosity.”

Other enterprise adopters of Google Apps on hand at the event included Genentech and the Morgans Hotel Group. During a presentation on the state of Google Apps product, Dave Girouard, president of Google Enterprise, said that the company has “dozens” of companies with more than 1,000 employees using Apps. He also said that it has generated “hundreds of millions” in revenue for Google

Why They’re Moving

Back in 2002, the Johnson Wax company acquired DiverseyLever (Unilever’s division for cleaning supplies), forming what is now known as the Wisconsin-based JohnsonDiversey. From a technology perspective, there was an immediate problem with the combination: Johnson Wax was on IBM’s Lotus Notes, and DiverseyLever was on Microsoft Exchange.

In the following years, for Hoag and his IT group, having two e-mail systems was challenging, if not annoying. They needed the two e-mail systems to talk with each other to deal with meetings, events and other core functions inherent to enterprise communications. JohnsonDiversey also had to own eight servers to host all the data contained within them.

Meanwhile, JohnsonDiversey became committed to lowering its carbon footprint, which included using energy more efficiently and cutting travel. So when it came time to reevaluate his e-mail contracts, he says Google Apps became an attractive option to simplify messaging to one platform and help fulfill the sustainability pledge; in effect, they could offload e-mail servers and limit travel by utilizing the collaboration features on Google Apps, such as its voice and video chat.

“We not only reduce the servers we have, but because of Google’s model, their servers are more efficient than what we could ever have. So globally we’ve reduced our global footprint,” Hoag says.

Hoag is referencing Google’s data centers, which the company has designed to be more energy efficient than most in the industry. More precisely, servers are a big part of Google’s business, while commercial cleaning supplies is JohnsonDiversey’s.

Of course, the other upside could be cost savings. Back in January, Forrester estimated that enterprises adopting Gmail would cost (all in) $8.47 per user per month. The next cheapest option would be Microsoft’s online cloud-based version of Exchange, which costs $20.32 per user per month.

Just how much money will Hoag save? He says a “substantial amount,” but it’s also early in his process, so ROI may be hard to prove just yet. Other companies who have moved might provide him with some indication, however.

At the CIO roundtable, Avago’s Rudy said his company has saved $1.6 million a year. In the U.K., not long after implementing Gmail and dropping Exchange, Taylor Woodrow, a construction firm, claims to have saved $2 million.

“The number one reason [for switching to Google] is economics,” says Gartner’s Cain. “$50 a user a year is a compelling price point. Plus, access to a lot more storage is a big issue for a lot folks. IT also gets off the upgrade treadmill.”

By “upgrade treadmill,” Cain is referring to the traditional model of software updates. Microsoft Exchange and Lotus Notes would take years to add new features to its e-mail systems; Google tweaks Gmail and Google Apps every week or two. For some companies, though, this can also be too much, too fast — something Google has become more conscious of during the past year.

“It is a bit of adjustment for some,” says Rajen Sheth, a Google Apps senior product manager. “Anytime we roll out a change to Google Apps, we roll it out to millions of users, whether it be enterprise or consumers. So then they get a call in their help desk the next day. So we’ve added the capability to the administrative control where they can select whether or not they want the new, bigger things added immediately or not.”

How to Move

Back in January, after Hoag decided on Gmail, he and his group thought about the best way to roll it out to users. Initially, his IT group thought about releasing Gmail in phases, as they would for many traditional IT projects. They were going to start with 150 users, primarily leaders and managers, and then move the remaining employees gradually.

The problem with that approach was familiar: If you have people of different platforms, the information traded between them doesn’t talk as cleanly as you would like.

“That was our biggest lesson learned,” Hoag says. “Get them on the same tool as quickly possible. So in March, we changed our approach. We scheduled to go live in May for everyone.”

One question that often arises is what you do with old e-mails. Hoag says JohnsonDiversey deployed a tool that enabled users to choose which e-mail they would like to migrate over to the new system. Meanwhile, as the transition occurred, he said Google had people on site to help with the implementation.

For now, the ultimate goal is to get users acclimated to Gmail and chat (instant messaging). Eventually, while Hoag has no plans to ditch Microsoft Office, he hopes to use Google Docs & Spreadsheets, and Google Sites (a wiki tool), to sunset old folder structures that were used for enterprise collaboration.

Hoag admits moving to the Gmail interface, which people have become used to in the consumer space, has put him in an unfamiliar place with regard to IT’s relationship with users.

“Users feel like we’ve giving something to them rather than doing something to them,” he says.

C.G. Lynch covers Google, Facebook, Twitter and Web 2.0 technologies for CIO. You can follow him on Twitter: @cglynch.