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Microsoft Bests Google, IBM In San Francisco's Cloud E-Mail Migration

Microsoft beat out Google and IBM to provide the cloud e-mail system for the city of San Francisco in a deal that city officials said will run $1.2 million per year.

Microsoft won the city of San Francisco's municipal cloud computing contract, as the city on Wednesday revealed that it will replace its current on-premise e-mail systems with Microsoft Exchange Online and Microsoft Business Productivity Online Services (BPOS).

San Francisco CIO Jon Walton said the deal runs $1.2 million per year and will move more than 23,000 of San Francisco's municipal employees from 60 departments to the cloud-based e-mail service. The cloud e-mail system will cost about $6.50 per user per month, he said during a conference call.

Walton said the City by the Bay evaluated Microsoft, Google Apps and IBM Lotus Notes, but Microsoft Exchange Online was the best fit for San Francisco's five-year technology plan. "We weren't making the decision just about e-mail," Walton said, adding that the city's IT environment already includes Microsoft Office and will soon include SharePoint and Windows Azure.

"We actually considered Lotus, we looked at the Google solution and at the Exchange solutions," Walton said. "At the end of the conversation it was unanimous among all the CIOs in the city that Exchange was the best solution."

There was not an RFP for the project, Google pointed out in an e-mail to CRN, meaning Google didn't get to present its own case via a competitive bid process.

"We're disappointed we didn't have an opportunity to compete for San Francisco's business,’ said Google spokesperson Andrew Kovacs. ’Through a competitive bid process, the majority of customers choose Google, and the rest get a great deal on their Microsoft license."

Walton added that the city is also evaluating Microsoft Office 365 to see if that makes sense.

"It's more than just a single-point solution, it's a strategy for us," Walton said of the e-mail switch. The city expects it to take 12 months to move its employees off of seven disparate e-mail systems: two different Lotus Notes systems and five different on-premise Exchange systems.

According to Walton, the 300-user Microsoft Exchange Online pilot also demonstrated security and disaster resilience that the city requires, while also meeting the security requirements for San Francisco's public safety agencies, like the San Francisco Police Department, which is also considering making the move to the new e-mail system after more evaluation.

Additionally, scrutiny by San Francisco's public safety agencies comes as Google struggles to finish its cloud computing project for the city of Los Angeles, which has been plagued by delays due to the Los Angeles Police Department and others fearing it wasn't secure.

L.A. tapped Google and solution provider CSC in late 2009 to move city employees off of its aging Novell GroupWise system to Google Apps for Government for cloud computing, e-mail and collaboration. In July 2010, the Los Angeles cloud project hit delays and Google and CSC had missed the June 30, 2010 deadline to complete the project. The delay, the city and Google said at the time, stemmed from security concerns from some city agencies, namely the LAPD and other public safety organizations that were concerned with how sensitive data would be handled in a cloud environment.

Next: San Francisco Weathers Last Week's Microsoft BPOS, E-Mail Outages


In San Francisco, Walton said the city paid close attention to the Microsoft system's security and access controls and said the system could prevent a similar incident to the 2008 San Francisco network hijacking by then network administrator Terry Childs, who locked the city's network, preventing access to data and information.

And Walton noted that last week's BPOS cloud outages, which sparked lengthy delays in Microsoft Exchange Online e-mail delivery, helped influence San Francisco's move to the cloud-based e-mail service. He said that the city's ability to call Microsoft during the outage, which occurred during the pilot program, cemented that Microsoft was its top choice. He said when the city has had e-mail outages in the past it was often left hanging in the wind waiting for a response or an update.

"E-mail outages, unfortunately, are something that's happened to us before," Walton said, noting that e-mail outages aren't just a cloud issue. He said last week's BPOS outage only affected San Francisco's Exchange Online pilot users for about four hours.

Microsoft Vice President of State and Local Government at Microsoft, Gail Thomas-Flynn, added that not having to fret during an outage or other hiccup helps government agencies remain focused on serving their constituents and customers, instead of having to put out IT fires.

The San Francisco win is another feather in the Redmond, Wash.-based software giant's cloud cap as Microsoft continues to compete with chief cloud foe Google for cloud computing contracts, many of which are state and local government deals.

Microsoft and Google have also squared off over the Federal Information Security Management Act (FISMA), a certification that shows a company's solutions have meet the security requirements necessary to be leveraged by government agencies. Microsoft last month accused Google Apps of lacking FISMA certification. Google quickly responded and pointed out that it was indeed certified under FISMA, and it was eventually revealed that Microsoft itself had not received full FISMA certification for its BPOS-Federal play, which Microsoft later obtained.

The question over FISMA came to light as part of a recent lawsuit in which Google accused the DOI of not opening the bidding processes for its cloud e-mail to competition and wording its proposal to heavily favor Microsoft. A judge has placed an injunction on Microsoft's DOI cloud deployment until the matter is sorted out further.

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