Software as a Service (SaaS, typically pronounced 'sass') is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own web servers or download the application to the consumer device, disabling it after use or after the on-demand contract expires. The on-demand function may be handled internally to share licenses within a firm or by a third-party application service provider (ASP) sharing licenses between firms. - Wikipedia

Recently I was asked by a local company to give them a proposal for a Microsoft Exchange Server. This company had been having issues with e-mail, and they wanted something more robust and reliable than their current solution. They were hosting the e-mail on-site using a software that allowed POP3 access to the e-mail. One big issue was reliability, and the other was data protection. Since everyone was downloading their email from the server, each users e-mail was not on the server being backed up, but on the local desktop – waiting for a failure to happen. If a failure DID happen, the entire individual’s e-mail would be lost. Not a good outcome.

So I started computing the numbers for an Exchange Server. It would need to support 60 users, and 40 of those would be at an overseas office. As a result, remote access was crucial. They also wanted at least 5 gigabytes of storage space for each mailbox. The customer also expected to be at 80 users within a year or two, so that extra space was taken into account.

So as I am calculating the costs, I quickly hit $10,000, and surpass it. I thought there might be a better solution for this situation. I started looking at a hosted e-mail solution. We sell hosted Exchange mailboxes. So we put that as an option in the proposal. We also are a Google Apps certified re-seller. So we added that as an option as well.

My calculations are below:

As you can see, Google Apps comes in well below an on-premise Microsoft Exchange Server. It also falls even further below a hosted Exchange/SharePoint implementation. But with this customer there were two very big things at play here.

1. The user base was very mobile, tech savvy, and most employees had laptops.
2. The need for easy remote access was pretty key, since a majority of the employees were overseas.

The remote access issue cannot be understated. With an on-premise solution if the internet went down, 40 users would be immediately without e-mail. Add to that, the geographic location of the office. It was within a few miles of the Gulf of Mexico. During hurricane season, there was a real possibility of at worst a storm, and at best, an evacuation. In that scenario, this customer did not have the infrastructure to stay on during a hurricane. There was no backup power, no backup generator. Without electricity, backup batteries would only last a few hours at the most. Again, this would leave the overseas office without e-mail. Not a good option.

When you think about that same scenario using a hosted solution, it is very different. Not only does the overseas office have connectivity, but so does the evacuated employees in Florida so long as they have internet where they evacuate to. So now, communication can happen with ALL the employees in all but the worst circumstances.

You cannot talk about hurricanes without talking about disaster recovery either. You see in all the pricing above, we have not even DISCUSSED backup and disaster recovery. So there is even MORE cost associated with the on-premise solution. Not so with the hosted solution, they are hosted in hardened data centers. In the case of Google Apps, there are over THIRTY data centers spread throughout the world. With the utilization of the “Google File System” the data has multiple copies all over the world, so data loss would be unlikely. Much less likely than say that of one server located in a single office a few miles from the Gulf of Mexico in an area prone to lots of lightning strikes.

Another cost that is not calculated, is support and maintenance. We could include electricity in this, but we can agree that that would be an added cost since it’s included in the hosted solution. What about technical support? Exchange Server cannot be installed and just left alone for 3 years. There are patches and updates that would need to be installed, anti-virus updates on the server, as well as user provisioning and password maintenance. All of the administration in Google Apps is done from its web interface. With Exchange it could happen either in Active Directory Users and Computers, or the Exchange System Manager. These programs can be intimidating and dangerous for a small business owner to use. The dangerous part is - one wrong click, here or there, and they could break something – resulting in more support.

There are downsides to the Google Apps solution that must be weighed too. One is support as well, or lack thereof. With Google Apps, if you have a serious issue and need to call them, you will be talking to someone far away in some other place. With Exchange, chances are there would be somebody like us doing that locally for you. Also, backup and disaster recovery could be something to worry about too. Just like having your data far, far away can be a good thing – it can also be a bad thing too. If something were to happen, there is no tape somewhere that will get it back. It’s gone for GOOD. Also, with Google Apps, you don’t have anything CLOSE to the features that Exchange has. But this customer was not really concerned with using all the shared groupware features from Exchange. They just needed good reliable e-mail.

So their options were to spend over $10,000 right up front to install an Exchange Server; or try Google Apps Premier for $3000 dollars up front. To spend five figures; and still have the remote access downsides, was not something the business felt comfortable with.  In the end, the customer chose Google Apps Premier over an on-premise Exchange Server. It has been a good fit for them, and they continue to be happy with the solution to this day. And they also have about $10,000 more in their pockets too!

Google Apps Premier isn't a good fit for everyone, but it's worth serious consideration if your looking for a Groupware solution.

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