Did Serena Software Really Save Big on Gmail?
|
News Analysis. One company claims $750,000 in savings by swapping out Exchange for Gmail. Really? |
It's the question some commenters have asked about eWEEK colleague Clint Boulton's story "Serena to Dump Microsoft Exchange for Google Gmail, the Cloud." Today's Exchange and SharePoint Online launches are great context for offering an answer.
Serena Software told Clint that it expects to save $750,000 per year moving its 800 employees to Google's Gmail from on-premises Outlook and Exchange Server. Could Serena really be spending $937.50 per employee for the Microsoft software?
Directions on Microsoft analyst Rob Helm described the amount as "way too high" for just the software. "Look at a gold-plated system for 800 users: Exchange Standard and Enterprise [client-access licenses] together cost around $100 per user, and Windows Server CALs costs around $30. Licensing two servers with Enterprise Editions of Exchange and Windows Server might cost $20,000 total, or around $25 per user." By his math, that works out to $155 per user.
"However, those are perpetual licenses," he continued. If the organization obtains Software Assurance and upgrades every three years, "the annual cost is at most one-third ($52 per user)" and could be lower "if the organization prepays for its upgrades through Software Assurance." Rob didn't include Outlook in the calculations, presuming that most businesses obtain the software with Office.
So, is that $750,000 savings bogus? No, says Rob, because of other factors. When including "savings on labor and hardware by moving from an on-premises to a hosted e-mail system, for that, the figure starts to seem reasonable."
So the real cost savings come more from going hosted than actual savings on Microsoft software. The $750,000 is a legitimate savings, but more because of on-premises costs well and beyond just software costs.
As Rob observed: "The organization might have been able to realize similar savings by moving to a hosted Exchange system from Microsoft or another vendor, which might cost more annually but have lower retraining and other migration costs."
Gartner analyst Neil MacDonald agreed. "A more apples-to-apples comparison would compare Gmail to Exchange Online—about $10 per user per month—and specifically the [Outlook Web Access] version of Exchange Online, which is about $2 per user per month, less storage though."
So, I've got to wonder why Serena Software didn't look at hosted Exchange, particularly considering the company plans to stick with SharePoint. Forrester analyst Sheri McLeish offers some speculative explanation: price and complexity.
"Google pricing is straightforward—$50 per user a year for the Premier package, which gets you basic messaging (e-mail and calendaring), some collaboration with light versions of productivity apps (Google Docs, content storage and sharing—including video), basic support (e-mail, phone), and core integration capabilities (single sign-on, e-mail migration tools)," she said.
By comparison, while offering greater familiarity and customization, "Microsoft's approach is much more complex," she said. "Microsoft also bundles its messaging, collaboration and Live Meeting offerings into a suite for $15 a month. With this basic package an enterprise is looking at $180 per [year]—and that doesn't include productivity tools like Microsoft Word."
Sheri emphasized that from a pure pricing standpoint, "Microsoft is not competitive with Google." For what Serena pays Google (estimated $40,000 annually), the cost would be considerably higher from Microsoft.
Still, Serena isn't yet ditching Office and plans to stay with SharePoint, which leaves a huge opening for Microsoft to woo back the customer. Office and SharePoint are tightly integrated. Serena employees could collaborate around Google Apps, but only Gmail is being used for now. Will Gmail really be enough to keep Microsoft out the door? Please answer the question in comments or by e-mail.
[Editor's Note: Analyst quote corrected.]
[Please send your tips or rumors to watchtips at live.com].
Comments (12)
Serna software who?
It will take years for Google to get close to Microsoft's office offerings. And MS is not sitting idle as you said. There would always be companies trying different solution. If I were Steve Ballmer, I would care less
Posted by wale | November 17, 2008 4:23 PM
Joe Says :
Still, Serena isn't yet ditching Office and plans to stay with SharePoint, which leaves a huge opening for Microsoft to woo back the customer.
But the fact is:
http://tinyurl.com/54w9st
"And as for our plans to jettison Sharepoint, we have already made major strides towards this by using HiveLive, a hosted collaboration platform for internal and external document management. As we get further into our Gmail deployment we will drop Sharepoint, which should take place in the next couple months."
Kyle Arteaga
VP, Corporate Communications
Serena Software
Posted by n0neXn0ne | November 17, 2008 4:48 PM
I think MS's corporate select program tends to bundle in too many things, usually through aggressive sales tactics. Hence many customers have bought quite a bit of software they never use (who uses Access in Office anyway?). As a result many companies are finding that if they buy exactly what they need elsewhere its a big savings over MS. MS tends to also jack up the prices once you are on the program, causing much dissatisfaction. E-mail is pretty simple, you don't need a giant MS infrastructure and IT department. GMail is plenty good enough and way less hassle (at least saving you talking to MS sales people).
If the economy continues to decline, and companies look to save money more aggressively, I think they will be choosing solutions like GMail and OpenOffice far more. Not to mention inroads by all the other low cost online alternatives.
Posted by smist08 | November 17, 2008 5:31 PM
I read an article on Ars Technica which noted that Googles market share of the productivity market is 1%. So, its hard to see them really stepping on Microsoft's toe anytime soon much less the entire foot. I think Serena is probably realizing that its a mistake or will soon, taking into account they could have saved that $750,000 instead of investing in Google apps premier edition by moving to Microsoft's online suite.
Taking into account, if they wanted to further move away from internal management of IT, Office 14 coming in the future with core web versions of traditional productivity apps like Word, Excel and OneNote it would have been a bargain for for them, plus Outlook Web Access.
Posted by Andre Da Costa | November 17, 2008 5:32 PM
Quote Andre "I read an article on Ars Technica which noted that Googles market share of the productivity market is 1%"
-
Unproven and irrelevant. According to figures the market share of Openoffice users is higher than Google apps. IT DOESNT MATTER. A saving is a saving and getting functionality they require at a lower price is great, who cares what anyone else is using.
-
Another great advert there Andre. Office 14? Great! We'll look forward to it.
-
Andre you've proven what Ive said all along, MS Agents dont want people to have a choice. The fact that a company has made a choice and a saving is so distasteful to you that you feel the need to paste another ad for all to see.
-
Talking of ads, and to end off topic. Anyone seen the Life without walls ads from MS that have a Penguin on them? Could it be MS is trying to belittle something it fears? IMO 2009 will be "Life without Microsoft" and we are already seeing the start of it in every area of MS's empire that is being eroded away by users fed up with the same old MS bull.
Posted by Goblin | November 17, 2008 7:18 PM
I always get a laugh about the penguin "Life without Walls" ads. Just replace any instances of the word "Windows" or the Windows logo with "Linux" or Tux, respectively, and that would be the most true thing ever spoken by Microsoft.
Nice ad, Andre. Maybe one of these times, just for a change of pace, you could also advertise one of the many laptops that I'm sure you have received from Microsoft over the years for services rendered.
Posted by Jack | November 18, 2008 12:25 AM
I have heard (note that this was in a conversation, not from any official source) that Google themselves don't use GMail for company email.
Exchange is more than just email. I can go to Outlook, type in a name and open up calendars of my coleagues. When I book a meeting, I can compare calendars and make sure the time suits. For a business, this calendar sharing is immensely valuable. I know Google provides a calendar function, but does it give the same ability to view and compare the calendars of other people in the business?
SharePoint is a whole other arguement from email. n0neXn0ne gave the quote about them considering an alternative for document management, but SharePoint goes far, far beyond document management and colaboration. I suppose it depends whether they're talking about SharePoint Services or SharePoint Server, both of which get refered to as SharePoint and one of which is much more powerful than the other. I'm not aware of any company that offers a program with all the capabilities of SharePoint (IBM comes close, but companies would have to buy loads of separate programs that don't necessarily integrate well). I'll probably be accused of advertising for this paragraph but I wanted to make it clear that, regardless of any discussion of email options, SharePoint 2007 is much more than just document management.
Posted by Jess Meats | November 18, 2008 10:10 AM
@Jess Meats, yes Google Calendar allows you to share your information with others and let them set appointments in your calendar.
PS, we use Gmail and Google's online apps and calendar in our business. It works pretty well. I particularly like the synchronized editing you can do on documents. That I found lacking in SharePoint. At least when I was introduced to it back in '05 or '06. It looked more like an ftp service with file lock than a version control system.
Posted by Gerardo Tasistro | November 18, 2008 10:31 AM
I'll back out of the Exchange argument now before I show up my ignorance even further.
I've no experience with the older versions of SharePoint (I've been with Microsoft only two months) so I can't make any comment on the version you tried. I've been told, by people who really ought to know what they're talking about, that MOSS 2007 is hugely improved on 2003 and has many more features. It certainly has excellent version control now.
Posted by Jess Meats | November 18, 2008 10:40 AM
Dig deeper Joe.
As someone with full access in to Microsoft's licensing database here's what I can tell you.
1. Serena's savings claims are amazing considering what they are actually paying for Exchange, which is close to nothing. They have the following licenses: 1 Exch 2007 Std Server, 15 Exch 2007 CALs, 45 Exch 2000 CALs, and 250 Exch 5.5 CALs. What I think is more likely is that MSFT came after them for non-compliance (a nice word for stealing) and they decided to attempt some retribution by publicly "switching" to GAPE. Based on what I see, GAPE will actually cost them more than what they spend on Exchange today.
2. If GAPE is really ready for prime time, why does Google have a Microsoft Enterprise Agreement with over 24,000 Core CALs, 1 Exch Std Server, and 4 Exch Ent Server licenses? The argument could be made that the Core CAL was break even for them if they are using SMS, MOSS, and Win Server CALs, but I doubt that's the case.
Posted by anonymous | November 19, 2008 2:17 AM
Hey Anonymous - real nice of you to post confidential customer information. Seeing as how you either work for Microsoft or a LAR, you have violated your employer's contract(s) with Google and Serena and, I suspect, your own terms of employment.
Posted by industry guy | November 19, 2008 12:52 PM
Is Serena still alive? Well wait for another 6 months to see it go :)
Posted by Ganesh | November 19, 2008 9:06 PM