500-employee company moves from Notes 6.5 (the article's first paragraph incorrectly says Notes 8) to Google gmail...let's take a look:

February marks the second anniversary of Google Apps Premier Edition, the beefed-up version of the free Google Apps hosted service launched in 2002 that revolutionized consumer email. For $50 per user per year, the premier edition offers "businesses of all sizes" a communication and collaboration suite of applications that includes Gmail webmail, shared calendaring, Google docs, instant messaging and Voice over Internet Protocol service. But two years in, very few enterprises have made a big commitment to use Google docs as a replacement for Microsoft Office or similar tools, said analyst Tom Austin.

"In fact, I can't think of one, to be honest," said Austin, who follows cloud computing at Stamford, Conn.-based Gartner Inc.
Sort of shoots this argument down...

Anyway, this CIO in this story sees things different, and goes on to explain:
Hodge's team calculates that moving off Lotus Notes to Gmail will save about $500,000 in capital and operating costs over five years, and another $400,000 in labor. And that includes switching out the company's Palm Treos for BlackBerry smartphones, which sync up with Gmail.
OK, so they were projecting spending an additional $900,000 over five years -- on top of what they expect to spend for Google ($50/user/year x 500 users x 5 years = $125,000 plus the operating costs of managing their directory and helpdesk in the gMail environment).  Add all that up and it's over $1 million, for 500 users, for five years...$400 per user per year...$33.33 per user per month.  Interesting, since Lotus Notes Hosted Messaging costs between US$8 and US$14/user/month with zero migration and retraining costs...

Now, I know cloud and SaaS-based e-mail is finally coming into its own in the market, with analysts like Forrester taking aggressive postures on the cost-effectiveness.  If you are looking at a pure e-mail discussion, it certainly makes some sense.  But I guarantee we could have upgraded this customer to Notes/Domino 8, on-premise or hosted, for a lot less than their projected costs.  And I also guarantee that US$50/user/year is not the end of what they'll spend in migrating to Gmail.

Link: SearchCIO-Midmarket.com: CIO's cost-cutting measures include move to Gmail >

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