Can Google Apps Supplant Microsoft Exchange?

Google has made it one of its many missions to woo users away from Microsoft Exchange in favor of its Google Apps cloud computing offerings for communications like e-mail, messaging, calendar, contacts and collaboration.

In the past few months, Google has launched tools that make it simpler for businesses to migrate off of Exchange, Microsoft's flagship communications product, and off of Microsoft Outlook and onto Google Apps -- promising quick, simple and relatively painless transitions.

And as recently as last week, Google offered some insight into its progress as it pillages users away from Microsoft Exchange and other rival platforms. According to a Google blog post, companies are leaping off of Exchange in a bid to "go Google" at a rapid clip, leveraging the Google Apps Migration for Microsoft Exchange tool and the Google Apps Migration for Microsoft Outlook tool.

"These tools have helped unshackle thousands of organizations from their previous technology solutions," Hicham Alaoui, Google Apps Marketing Manager, wrote in the blog post. "Our customers have migrated more than 2 billion e-mail messages to Google Apps, and in the past two months alone, more than 14 million calendar events and 6 million contacts (not counting domain-wide address lists) were migrated to Google Apps from Microsoft Exchange and Lotus Notes."

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Google also offers an IMAP mail migration tool for transfer of Microsoft Exchange Server 2003 archives to Google Apps and the Google Apps Email Migration API which lets admins migrate legacy e-mail systems into their domain's hosted Gmail accounts.

Abhishek Bapna, Google Apps product manager, said the cloud computing wunderkind has roughly 2 million businesses currently using Google Apps spanning the spectrum from SMB to large enterprises with tens of thousands of seats. Google could not say specifically how many of its business users were previously Exchange shops, but Bapna noted that "many of them are coming off of Exchange."

Google credits the migrations to its ability to move users to Google Apps easily and quickly, while also cutting costs in the long run due to fewer infrastructure requirements. The bulk of the savings comes in straight hardware and software costs, but management costs can also be cut out of the equation, said Chris Vander Mey, Google Apps senior product manager.

By many accounts, Google Apps and Microsoft Exchange stack up relatively evenly when it comes to critical features and functions, save for a few differences here and there. But is that enough for Google to make hay against the incumbent?

Next: Google Partners Weigh In

Ed Laczynski, CTO and founder of LTech, a Bridgewater, N.J.-based Google Apps reseller that offers Microsoft Exchange migrations services, said yes. LTech sees the transition from Exchange to Apps first hand. Laczynski couldn't say exactly how many companies he's moved from Exchange to Google Apps, but said the midmarket has been quick to make the jump. Laczynski also noted that "Exchange had been our bread and butter" before Google Apps stormed the scene and cloud computing offered new inroads.

"By mid-2008, we decided to stop actively offering Microsoft-based collaboration solutions to customers," Laczynski wrote in a post on the Google Enterprise Blog. "This was a big move for us, and a bit scary, but the Microsoft platform wasn’t evolving at the pace our customers demanded. The Microsoft Partner Program didn’t foster the same type of opportunity as Google for a start-up company like ours. Our Google Apps business was taking off and we haven’t looked back. We have grown to a multi-million dollar business with dozens of cloud technologists and a national footprint, helping to pave the way for business adoption of cloud."

Laczynski said that LTech has seen its Google Apps sales increase quarter after quarter, and over the last two or three quarters he estimates that 80 percent of LTech's Google Apps deployments involve migrations away from Microsoft Exchange.

Several factors play into the move from Exchange to Google Apps, Laczynski said. Cost savings is a big one. Mobility is a close second.

"In 2010, it's more about productivity and agility in an era where you have a mobile workforce," he said, adding that by mobility he's not talking about field workers pounding away on a smartphone, but a workforce that isn't office based and is working on laptops at any given location at any given time.

Collaboration capabilities are also a driver to Google Apps, he said, noting that under the old guard e-mailing attachments, VPNs and long delays are still the norm, while Google Apps offers easy and quick collaboration via Docs and other collaborative features.

"To collaborate over a distance using the tools of 1995 is difficult," Laczynski said.

And while the midmarket has been a boon for migrations off of Exchange and onto Google Apps, Laczynski said the enterprise is starting to come around, though they require more proof, a longer sales cycle and often have to be in a business transition due to upgrades or merger and acquisition activity.

LTech's experience, Laczynski said, shows that Google Apps could overthrow Microsoft Exchange in the midmarket, but in the enterprise, it could take more time.

"I can see it definitely happening in the mid-market in the next 5 to 10 years," he said, comparing the shift to Exchange supplanting Lotus Notes. "In the enterprise it's a battle; it's literally a war. The enterprise will be a completely different battle."

NEXT: Replacing E-mail Not Everyone's Priority

Eric Berridge, co-founder of Bluewolf, a New York-based cloud solution provider and Google reseller partner, agreed.

"The challenge Google has going after the big corporations is that for most CIOs replacing e-mail is not a priority," Berridge said. "It already works."

Berridge said large organizations will be forced to weigh the pain of moving hundreds or thousands of users off of Exchange for Google Apps versus the potential savings, which can be in the millions, but may not be a priority.

In Bluewolf's case, the 300-person shop felt some pain when moving to Google Apps 4-½ years ago. But for a larger organization "for a CIO to rip out an e-mail system, that can make enemies."

Berridge said it's possible for Google to supplant Microsoft Exchange in smaller companies, but right now the large enterprise just isn't ready.

"To get organizations to switch out Microsoft is hard," he said. "It's not a pain point for a CIO. Exchange works. How do you get around that? That's the question."

Laczynski added that Microsoft is going to fight to protect its territory and not let Google Apps eat away at its legacy. He said the price competition between Google and Microsoft is heating up and Microsoft is continuing to trumpet its all-in philosophy for cloud computing. Microsoft is also battling with its Business Productivity Online Suite (BPOS), for example, which ties together hosted versions of Exchange, SharePoint and Office Communication Server and is integral to Microsoft's cloud strategy.

And there are some who wonder if Google Apps even stands a chance against Microsoft Exchange, let alone has enough pull to spark a mass exodus.

"While we always hear about Google Apps ... it has not affected our run rate," said Bob Leibholz, vice president of sales and business development for Exchange hosting provider Intermedia. Leibholz said Intermedia has seen quite the opposite: Since launching Exchange 2010, it's brought on 25,000 hosted mailboxes.

Leibholz said Intermedia has occasionally lost deals to Google Apps, but it has not yet had a massive impact. When deals are lost, it's usually around price, since Google Apps runs $50 per user per year. Leibholz, however, said Microsoft Exchange is still more robust than Google Apps and still wins in the service and support category. Additionally, he said, Microsoft Exchange still has a stronger mobility story with full BlackBerry Enterprise Server support and ActiveSync service, mobile security, remote wipes and other functions.

And though Google often chides Microsoft for its supposed lack of collaboration, Leibholz said Exchange offers stronger collaboration capabilities than Google Apps. Google, he said, is great for internal collaboration, but once collaboration stretches outside of corporate walls it is less effective.

Hosted Exchange also wins with stronger SLAs, tighter security, stronger shared folders, and a host of other functions, Leibholz said. Still, Leibholz noted there will be a place for both Exchange and Google Apps going forward, depending on specific client needs.

"Google is an up and coming product and I think 18 months from now it will be a much stronger product."