The City of Winston-Salem, North Carolina, has never owned an Exchange server, but starting on Memorial Day it will roll out Exchange and Outlook e-mail for 2,700 of its workers.
Winston-Salem - population 230,000 - is yet another in a recent spate of city governments that have chosen to move to a cloud service for e-mail and collaboration. With tighter budgets than most corporations, government agencies have been the first wave of cloud adopters, setting off a war for Uncle Sam's business between Google (Google Apps) and Microsoft (Office 365).
Phase one of Winston-Salem's cloud strategy: Move to Exchange/Outlook Online after many years of using Novell Groupwise for e-mail and collaboration and Novell ZENworks for desktop management.
"Groupwise is a good e-mail platform, but there have been support issues and Groupwise only works with BlackBerry smartphones, which is a limitation," says Winston-Salem CIO Dennis Newman.
"Outlook is well-accepted. Most of our employees have used Outlook before."
Of the 2,700 seats that Winston-Salem is deploying, 2,100 are fully-functional desktops and 600 are "deskless" workers - labor positions like sanitation pickup and landfill workers - who don't have desks but still need occasional e-mail and network access.
Winston-Salem tested out Google Apps and Gmail on these deskless workers as a way to evaluate Google's cloud service without having to make the full commitment.
"Nothing was wrong with Google Apps," says Newman. "Gmail is a rich environment, and customer support was good. But we were not willing to replace Office with Google Docs, and the cost of having Google Apps and Office client was too much for us."
The fact that Microsoft packages Office client and Office 365 in an enterprise agreement in a more affordable way was a differentiator for Newman.
"To fully invest in Google Apps meant we would have to uninvest in Microsoft Office licensing," he says, "To take away Office from our users would not be well received unless it was saving us money."
In related news this week, the City of San Francisco announced on Wednesday that will upgrade its citywide e-mail systems for 23,000 employees across 60 departments and agencies to Exchange Online for e-mail, calendaring and hosted archiving. The service will cost $1.2 million and will achieve a reported 20 percent budget reduction.
San Francisco's CIO Jon Walton said in a press conference yesterday that after considering Google Apps the city went with Microsoft because Exchange Online complements the other Microsoft apps that the city already uses.
This is another example of the power of the Microsoft ecosystem and it's a key reason that Winston-Salem chose Office 365 and Exchange Online over Google Apps.
"I have to improve technology with a constrained budget," says Newman. "Because we were able to package Microsoft cloud and local products in one enterprise agreement, we ended up with more bang for no additional cost."
Newman further explains the cost analysis:
"We took our existing direct licensing costs for e-mail, spam, virus filtering, web filtering, BES [Blackberry Enterprise Server] services, and desktop management tools and compared the cost for the same services integrated into a new Enterprise Agreement that included Office 365 and other Microsoft products."
"The result was very close, allowing us to make the upgrade from our older technologies within our operating budget with no need for more investment."
Winston-Salem also plans to be a heavy user of SharePoint for document management when Office 365 becomes generally available "later this year." Newman has wanted to use SharePoint for awhile, but there were cost issues.
But as Winston-Salem ramps up for its Memorial Day switch to Exchange Online, the immediate focus is on e-mail.
Here are the two features in Office 365/Exchange Online that stood out the most to Newman.
Advanced Archiving and Enterprise Search: Exchange Online has advanced built-in features for archiving, compliance, regulatory and e-discovery needs. Because the retention of public records is vital to any city government, Newman singled out archiving as Exchange Online's best management feature.
"We are able to search across multiple mailboxes and access e-mails and documents quickly," he says. "It's a feature that's available from third parties, but it's very expensive."
Exchange Online's built-in enterprise search functionality - which Microsoft gained as part of its Fast Search acquisition in 2008 - is another plus for Newman, and something that the City Attorney's Office requested to be part of an e-mail upgrade.
"We often get a request saying, 'We need copies of all e-mails sent from this person to any city employee.' I can respond to that much easier in Exchange Online because of enterprise search," says Newman.
More Smartphone Support: Newman has not been able to support a variety of smartphones, because Novell Groupwise only supports BlackBerry.
That will change with Exchange Online. City employees will now be given a choice for city-sanctioned smartphones: iPhone or BlackBerry.
Newman also highlighted a significant difference between Office 365 and its predecessor, BPOS, regarding mobile support.
With BPOS, IT managers could allow either all smartphone users with Exchange mailboxes to use ActiveSync or nobody could use it. You could turn it on or turn it off. With Office 365, you can manage ActiveSync at an individual level, case by case, says Newman.
"Better management and security of devices is really important to us," he says.
Shane O'Neill covers Microsoft, Windows, Operating Systems, Productivity Apps and Online Services for CIO.com. Follow Shane on Twitter @smoneill. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Shane at email@example.com
Read more about cloud computing in CIO's Cloud Computing Drilldown.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.